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EXHIBIT 10.8
LEASE
THIS LEASE (the "Lease") is made and entered into as of the 6th day of
November, 1996, by and between AGRACEL, INC., an Illinois corporation,
hereinafter referred to as "Lessor", and XXXXXX METALCRAFT CO., an Illinois
corporation, of 0000 Xxxx Xxxxxxxxx Xxxxxx, X.X. Xxx 000, Xxxxxx, Xxxxxxxx
00000-0000, hereinafter referred to as "Lessee".
1. PROPERTY LEASED:
(a) Lessor shall lease to the Lessee and Lessee shall lease from Lessor
that certain parcel of real property legally described at Article 1 (b) below
(the "Land"), together with the buildings and improvements to be erected
thereon by Lessor according to plans and specifications described on Exhibit A
attached hereto (the "Building"). The Land and the Building are hereafter
referred to as the "Premises".
(b) The Building is to be constructed on the Land described as: See
attached Exhibit B.
(c) (i) Lessor agrees to construct the Building on the Land in
accordance with the plans and specifications attached as Exhibit A hereto, as
the same may be amended from time to time by agreement of the parties, as set
forth in written change orders signed by both parties or their designated
representatives. Lessor further agrees to provide such on-site improvements as
are delineated in Exhibit A hereto.
(ii) Lessor agrees that such construction will be under roof and
sufficiently complete to take delivery of Lessee's equipment not later than
February 3, 1997, and that all such
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construction except for punch-list items will be completed, and a certificate
of occupancy sufficient to permit Lessee to begin manufacturing operations will
be issued, not later than March 14, 1997. Punchlist items will be completed not
later than May 15, 1997.
(iii) Lessor agrees to secure all necessary permits for such
construction; that such construction will be completed in a good and
workmanlike manner; that materials and workmanship will be of such quality as
is usual and customary in the Wake County, North Carolina area; and that all
such construction shall comply with all applicable building and safety codes,
and shall comport in all material respects with the plans and specifications.
(iv) Lessor shall provide usual ventilation, heating, air
conditioning, electrical, plumbing, and mechanical systems, equipment, and
fixtures for the Building, to the extent set forth in Exhibit A hereto.
(v) Upon the commencement date, or as soon thereafter as they shall
become available, Lessor shall deliver and transfer to Lessee all
manufacturers' warranties, owners' manuals and related materials. Lessor
warrants the workmanship and materials of the Building and its components
installed by Lessor, its subcontractors, agents, and anyone working under
Lessor's control, for a period of one (1) year after the commencement date
hereof.
(vi) Lessor warrants that upon completion of the improvements, public
utilities providing water, electrical power,
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natural gas, telephone and sewage disposal, will be available to the building.
Lessee will pay any "turn-on" costs.
(vii) Lessor warrants that all improvements to be constructed
will comply with all building codes, zoning laws, minimum size requirements,
setbacks and required parking.
(viii) Lessor warrants that the improvements will, to the extent
required by the American with Disabilities Act, comply with the Act.
(d) So long as Lessee is not in default of this Lease and so long as
there has been no adverse material changes in Lessee's financial condition and
business prospects, Lessor agrees to construct at Lessor's expense expansions
to the Building at any time and from time to time upon written notice from
Lessee on the following terms and conditions:
(i) Initial annual rental for each expansion shall be determined
according to the following formula: (A) Actual Cost (hereinafter defined) of
the expansion multiplied by (B) a percentage equal to the sum of the Lessor's
actual cost of funds for the expansion plus four and one-half percent (4 1/2%)
per annum. Initial Annual Rental for each expansion shall be paid for the first
year following the substantial completion of that expansion. Rental for that
expansion thereafter shall be based upon the initial rental for that expansion
plus 3% per year for the remainder of the term and any extensions. Rental shall
be payable in equal monthly installments in advance on the first day of each
month commencing on the date of substantial completion of the expansion of the
Building.
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(ii) The "Actual Cost" of each expansion to the Building is herein
defined as the cost of financing, cost of materials and labor, the fees of
architects, engineers, surveyors, and other professionals; actual out-of-pocket
costs for obtaining permits and other governmental approvals; and any other
out-of-pocket costs actually and reasonably incurred by Lessor for construction
of the expansion of the Building, as such costs may be adjusted (by increase or
decrease) by change orders mutually agreed upon by Lessor and Lessee, all as
determined by an internal audit performed by Lessor and Lessee upon the
substantial completion of the expansion.
(iii) Lessee shall provide to Lessor a preliminary design for each
expansion which shall conform to all laws, rules and regulations then in effect
and applicable to the Building and which shall incorporate materials and
workmanship of a quality at least equal to that of the Building;
(iv) Lessor shall promptly estimate the Actual Cost (hereinafter
defined) of the construction of the expansion to the Building based upon the
preliminary design and provide to Lessee a written estimate in reasonable
line-item detail of the Actual Cost of the expansion. Upon Lessee's receipt of
Lessor's Actual Cost estimate, Lessee shall promptly notify Lessor of its
acceptance or challenge of Lessor's estimate of Actual Cost. If
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Lessee challenges Lessor's estimate of the Actual Cost or any line-item
thereof, Lessor shall promptly provide Lessee with three competitive bids for
each line-item to which Lessee's challenge relates, and Lessor shall award
contracts to the competitive bidders of Lessee's choice. Lessor's estimate of
Actual Cost, as adjusted by challenge as provided above, shall further be
adjusted (either by increase or decrease) to reflect any change orders mutually
agreed upon by Lessor and Lessee during the construction of the expansion.
(v) If the Initial Term (hereinafter defined) of the Lease at the
time(s) Lessee exercises its continuing expansion option is less than ten
years, then as a condition precedent to Lessor's obligation to construct an
expansion to the Building, Lessee and Lessor shall execute an amendment to the
Lease providing for an additional extension term (the "Amended Extension Term")
which, when added to the unexpired portion of the Initial Term, will equal not
less than ten years, calculated as of the date of substantial completion of the
expansion to the Building. The rental for the premises during the Amended
Extension Term, exclusive of the expansion(s), shall be the same as during the
initial term adjusted as set forth at paragraph 2. The rental for the
expansion(s) during the remainder of the Initial Term and the Amended Extension
Term shall be as set forth in Paragraph 1(d)(i) above. As used herein, "Initial
Term" shall mean the initial ten (10) year term of the Lease, inclusive of any
extension term as to which Lessee has then exercised its option pursuant to
Paragraph 3(d) below.
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(vi) Promptly upon establishment of the estimate of the Actual Cost
of the expansion as set forth in subsection (iv) above, Lessor shall promptly
commence and diligently pursue to completion the construction of the
expansion. If Lessor fails to provide Lessee with an estimate of the Actual
Cost of the expansion pursuant to the provisions of subsection (iv) above or if
Lessor fails to promptly commence and diligently pursue to completion the
construction of the expansion, then in addition to any other remedies Lessee
may have under this Lease or at law for Lessor's breach, and upon written
notice to Lessor, Lessee may at its own cost and expense undertake to complete
the construction of the expansion, calculate the Actual Cost of the expansion,
determine the rental due on the expansion in accordance with the terms set
forth in subsection (i) above, and offset from the rental due for the expansion
all costs incurred by Lessee in completing the construction of the expansion
until Lessee has been reimbursed in full.
(vii) All other terms of this Lease applicable to the
construction of the Building and the lease of the premises shall apply to the
construction and lease of the expansion to the Building.
2. RENTAL:
Tenant shall pay to Landlord initial rent in the amount of $3.46 per
square foot for 98,250 square feet for the first year of the term of this
lease. Rent payable thereafter shall be based upon the initial rent plus three
percent (3%) per year for the remainder of the Term and any extensions, payable
as follows:
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Year 1.................................................$28,328.75 per month
Year 2.................................................$29,178.61 per month
Year 3.................................................$30,053.96 per month
Year 4.................................................$30,955.57 per month
Year 5.................................................$31,884.23 per month
Year 6.................................................$32,840.75 per month
Year 7.................................................$33,825.97 per month
Year 8.................................................$34,840.74 per month
Year 9.................................................$35,885.96 per month
Year 10................................................$36,962.54 per month
beginning with the commencement date defined below, and continuing on the same
date of each month thereafter.
Lessee shall also pay to Lessor a sum equivalent to one month's rent,
which sum shall be held by Lessor in an interest bearing escrow account as
security for the faithful performance by Lessee of all of the terms of this
Lease by Lessee to be observed and performed. Interest on the escrow account
will be retained by and taxable to the lessor. At the end of the lease term,
provided the lessee has fulfilled its obligation under the lease, the escrow
balance will be returned to the lessee within thirty days of the end of the
lease. If the cost of construction of the building and improvements changes as
a result of changes requested by Lessee, then the rent shall adjust according
to the following formula:
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Agreed to increase Increase (decrease)
(decrease) in = in initial annual rent
cost x 12.75%
3. TERM:
(a) The initial term of this Lease shall be ten (10) years, beginning on
the commencement date (defined in paragraph (b) of this article) and ending at
12 o'clock midnight on a date ten (10) years thereafter, unless sooner
terminated as provided herein.
(b) The commencement date shall be March 15, 1997, or as soon thereafter
as the Building to be constructed by Lessor is substantially complete. The
commencement date shall be delayed for one day by each day of delay caused
solely by any material change orders required by Lessee. Each change order at
the time agreed to shall specify the number of days required to implement it.
If delays caused solely by Lessee in supplying plans and specifications or
because of change orders shall cause a delay in the completion date of more
than thirty (30) days, then the Lessee shall pay to Lessor a per diem rent for
each day in excess of thirty (30) days of delay calculated by taking the
monthly rent installment specified above at Article 2 and dividing it by 30.
"Substantially complete" means that a Certificate of Occupancy sufficient to
permit Lessee to begin manufacturing operations has been issued and the
Building is capable of being occupied by Lessee for its purpose of operating
therein a light manufacturing plant suitable for manufacturing sheet metal
fabrications upon installation of equipment for such purposes by
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Lessee as planned, even though some construction items may still be
incomplete and in the process of being completed. After the commencement
date has been determined, and upon the demand of either party, the parties
shall execute a declaration in recordable form expressing the specific
commencement and termination dates of the initial term.
(c) Lessor agrees that construction will be under roof to the extent
necessary to take delivery and provide suitable cover for Lessee's equipment
not later than February 3, 1997, subject to delay caused solely by Lessee.
Commencing on February 4, 1997, the Lessee may enter upon the leased property
at reasonable times for the purpose of installing equipment, furniture, and
fixtures. Lessee's activities may not unreasonably interfere with Lessor's
contractor's activities.
(d) The Lessee shall have one option to extend this Lease for a period
of five (5) years on the same terms as the initial term. Lessee shall
exercise this option by sending written notice thereof to Lessor not later
than March 15, 2006. During the extended term of this Lease, Lessee shall
pay rent at the Fair Market Rental (hereinafter defined). All other terms
of this Lease shall continue in full force and effect during the extended
term. "Fair Market Rental" is herein defined as the rental which a willing
tenant would pay Lessor for the rental of space of the size, location, and
configuration of the premises for the extension term, estimated as of the
commencement of the extension term. Within sixty (60) days after Lessor
has received notice from Lessee that Lessee is exercising its extension
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option, Lessor shall send to Lessee a written notice specifying the Fair Market
Rental as estimated by Lessor in accordance with this subparagraph and, within
fifteen (15) days after receipt of such notice, Lessee shall give Lessor
written notice of its acceptance or challenge of Lessor's estimation of the
Fair Market Rental; provided, however, that if Lessee challenges Lessor's
estimation of the Fair Market Rental, Lessor and Lessee shall endeavor to reach
an agreement as to the Fair Market Rental within fifteen (15) days after the
expiration of such fifteen (15) day period for challenge. If Lessor and Lessee
are unable to reach an agreement as to the Fair Market Rental within said time
period, they each shall immediately thereafter select an appraiser, each of
whom shall be a legally qualified commercial real estate appraiser with a
minimum of three (3) years' experience in the Raleigh, North Carolina
commercial real estate market, who shall determine the Fair Market Rental. The
appraisers shall be instructed to complete the appraisal procedure and to
submit their written determinations to Lessor and Lessee within thirty (30)
days after their selection. In the event that the determination of the Fair
Market Rental submitted by Lessor's appraiser is less than or equal to one
hundred five percent (105%) of the determination of the Fair Market Rental
submitted by Lessee's appraiser, the Fair Market Rental shall be the average of
such determinations. If the determination of the Fair Market Rental submitted
by Lessor's appraiser is greater than one hundred five percent (105%) of the
determination of the Fair Market Rental submitted by Lessee's appraiser, the
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appraisers shall, within ten (10) days, appoint a third appraiser with similar
qualifications to make such determination of the Fair Market Rental in
accordance with the foregoing limitations. The third appraiser shall be
instructed to complete the appraisal procedure and to submit a written
determination of the Fair Market Rental to Lessor and Lessee within thirty (30)
days after such appraiser's appointment. The determination which is neither the
highest nor the lowest of the three (3) determinations of the Fair Market
Rental shall be binding upon Lessor and Lessee. Lessor and Lessee shall each
bear the costs of their respective appraisers. The expenses of the third
appraiser shall be borne one-half (1/2) by Lessor and one-half (1/2) by Lessee.
Notwithstanding the foregoing, rental during the extension term for any and all
expansions to the Building constructed pursuant to the terms of Paragraph 1(d)
above shall be calculated in accordance with the terms set forth in Paragraph
1(d) above.
(e) If Lessor is delayed by more than thirty (30) days in (i)
substantially completing the construction of the building by March 14, 1997,
for any reason other than a delay caused solely by Lessee, Lessor shall pay to
Lessee $500.00 per day for each day that substantial completion is delayed.
Lessor shall not under any circumstances be liable for contingent or
consequential damages. The completion date shall be extended day for day by any
delays caused by Lessee.
4. USE OF PREMISES:
a) The premises are leased for the purpose of general light
manufacturing, including the manufacture of sheet metal
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components manufactured by Lessee and are not to be used for any other purpose
without first having secured the written consent of the Lessor, which consent
shall not be unreasonably withheld. No use of the building shall be made which
would increase the insurable risk of the building for fire and extended
coverage insurance.
b) The premises shall at all times after the commencement date be
accessible to semi-trucks.
5. PUBLIC REQUIREMENTS:
(a) Lessee shall comply with, and on date of commencement, the
improvements shall conform with all laws, ordinances, governmental orders and
regulations and other public requirements now and hereafter affecting the
premises or the use thereof, including but not limited to all recorded
covenants and restrictions, if any. Lessee shall save and hold Lessor harmless
from expense or damage resulting from failure to do so, except for such lack of
such compliance which exists and affects the premises or the use thereof at the
commencement date of this Lease. Lessor guarantees that the real estate is
properly zoned for those uses of the premises provided by paragraph 4.
(b) In the furtherance of, and not in limitation of, Lessee's obligations
under the foregoing paragraph, throughout the terms of this Lease, Lessee shall
do or cause to be done all things necessary to preserve and keep in full force
and effect permits required for the conduct of its business and operations from
the time of commencement of this Lease until its expiration or termination.
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6. ASSIGNING AND SUBLEASING:
Lessee shall not sublet the premises or any part thereof and Lessee shall
not assign, transfer, pledge, mortgage or otherwise encumber this Lease, or any
portion of the term thereof, without the previous written consent in each
instance of Lessor, and Lessee shall furnish to Lessor with each request a copy
of such proposed instrument; Lessor agreeing, however, not to arbitrarily
withhold consent to subletting for any legitimate business not detrimental to
the premises or adjacent property, or occupants thereof, and not more hazardous
on account of fire or otherwise, and not creating wear and tear to the premises
more than the business for which the premises are herein leased. Permission is,
however, granted Lessee to assign or transfer this Lease and also to sublet the
premises to any subsidiary corporation of Lessee, affiliate corporation of
Lessee, or parent corporation of Lessee, upon giving Lessor written notice of
intent so to do. Lessee shall have the right to transfer and assign this Lease
without Lessor's consent to any parent, subsidiary, or affiliated company of
Lessee or to any person or corporation acquiring all or substantially all of
the assets of Lessee by purchase, merger, consolidation or otherwise. An
affiliate company is a company which has at least a 50% common ownership with
Lessee. Transfers of Lessee's shares of stock as may occur from time to time
shall not be deemed a prohibited assignment of this Lease. In the event of any
assignment or subletting, Lessee shall remain the principal obligor to the
Lessor under all covenants of this Lease, and by accepting any assignment or
subletting, an assignee
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or sublessee shall become bound by and shall perform and shall become entitled
to the benefits of all the terms, conditions and covenants by which the Lessee
hereunder is bound.
7. INSURANCE--LESSEE:
(a) Lessee shall, throughout the term of this Lease, maintain fire and
extended coverage insurance on the premises leased in an amount equal to the
full insurable value thereof, in a company or companies rated Best A or better.
(b) Lessee shall, at its expense, during the term hereof, maintain and
deliver to Lessor public liability insurance policies with respect to the
premises. Such policies shall name both the Lessor and the Lessee as insureds
as their interests may appear, and have limits of at least $2,000,000 for
injury or death to any one person and $2,000,000 for any one accident, and
$1,000,000 with respect to damage to property. Such policies shall be in
whatever form and with such insurance companies as are reasonably satisfactory
to Lessor, and shall provide for at least ten days' prior notice to Lessor of
cancellation. At least ten days before any such policy expires, Lessee shall
supply Lessor with a substitute therefor, together with evidence that the
premiums therefor were paid. If Lessee fails to do so, Lessor may procure such
policies or pay such premiums. In such case, all amounts so paid by Lessor,
with interest thereon at the rate of 4% over Wall Street Journal's published
prime rate as published from time to time per annum, shall be added to the next
monthly rent installment coming due, and shall be collected as additional rent.
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(c) Lessee shall be responsible for its equipment, furniture, fixtures,
inventory and other personal property located on the premises and shall be
solely responsible for carrying whatever insurance it desires with respect to
such property.
(d) Lessor and Lessor's mortgagee, if any, shall at all times be named as
a co-insured on all policies of insurance required by this Lease and Lessee
shall provide to Lessor and Lessor's mortgagee, if any, a current certificate
showing compliance with this requirement, provided that Lessor shall have
notified Lessee in writing of the name and address of such mortgagee. Each
policy of insurance shall require notice to Lessor and Lessor's mortgagee prior
to cancellation.
8. TAXES:
Lessee shall pay all real property taxes, personal property taxes and
special assessments lawfully levied against the premises during the term of this
Lease. Taxes for the first and last year of the Lease shall be prorated between
Lessor and Lessee, based on number of days leased.
Lessee shall have the right to contest the amount or validity, in whole or
in part, of any tax by appropriate proceedings diligently conducted in good
faith. If the provisions of any law or regulation then in effect so require,
Lessor shall join in such proceedings.
9. MAINTENANCE BY LESSEE:
Lessee agrees to take good care of the premises and appurtenances thereto,
and to keep them in good repair, free from
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filth, overloading, danger of fire or any pest or nuisance, and to keep all
mechanical systems in good working order. Lessee agrees to maintain and replace
any plate glass or other glass in the building. To the extent not provided by
construction warranties and manufacturers' warranties, Lessee shall conduct a
continuing program of preventive maintenance covering such mechanical
equipment, including regular service and maintenance to heating and air
conditioning equipment by competent tradesmen. Lessee shall not permit any
waste of the premises. At the expiration or other termination of this Lease,
Lessee shall return the premises to Lessor broom clean in as good condition as
when received by Lessee, except only for normal wear and use, damage by fire,
explosion or other insured casualty and acts of third parties not under control
of Lessee. If Lessee fails to do anything required of Lessee in this paragraph
within a reasonable time, Lessor may, at Lessor's option, perform the same at
Lessee's expense.
10. ALTERATIONS AND ADDITIONS:
Lessee shall have the right, at its sole expense, to make non-structural
additions, improvements, or modifications to the interior of the building on the
premises for the convenient conduct of its business. All such changes shall be
made in a good and workmanlike manner and in accordance with applicable codes
and regulations. Lessee shall give Lessor prior written notice of any
alterations, additions, improvements or modifications so made.
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Lessee shall have the right to install such machinery, equipment, and
business and trade fixtures as it deems necessary, and such items shall remain
the property of Lessee and shall be removed at the termination of this Lease,
the Lessee repairing any damage occasioned by removal. If Lessee shall obtain
written consent of Lessor to leave any machinery or like equipment in the
premises, then the full title to such machinery and equipment shall thereupon
pass to Lessor.
11. LESSOR'S RIGHT OF ENTRY:
Lessor, or Lessor's Agent, may enter upon the premises at reasonable hours
upon reasonable notice to examine the same and to do anything required of
Lessor hereunder or which Lessor may deem necessary for the good of the
premises; and during the last 90 days of this Lease may display a sign offering
the premises for sale or for lease, which sign may be affixed in a conspicuous
place on the front of the premises.
Neither Lessor nor any of Lessor's agents who enters upon the premises
shall disclose to any person or entity any information, observations, data, or
visual impressions regarding the trade secrets or other confidential business
information of Lessee. Lessor and any of its agents agree that they will not
take any photographs, videotapes or other images of the interior of the
premises without the prior consent of Lessee.
12. SIGNS AND ADVERTISEMENTS:
Lessee is hereby granted the privilege of erecting signs on the front of
the premises, including in the front and side yards of the building, subject to
applicable laws and regulations,
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including but not limited to ordinances of the municipality in which the
premises are located and restrictive covenants relating to signs in the
industrial park in which the premises are located, if applicable. No signs
shall be erected which are attached to the roof of the building and no signs
shall be attached to the building at right angles suspended by guy wires, but
shall be attached flush to the building in a safe and secure manner. All such
signs shall advertise the Lessee's business, and no revenue producing signs
shall be permitted on the premises. Lessee shall not paint any signs directly on
the building, or otherwise deface, damage or overload the building. Lessee
shall remove all signs at the termination of this Lease, and shall repair any
damage to the building caused by signs at its sole cost and expense.
13. LIABILITY:
Lessee hereby relinquishes all claims, releases, assumes all risks and
agrees to hold Lessor harmless from any liability for any damage done or
occasioned by or from any plumbing, wiring, gas, water, steam, sprinkler
system, equipment or other pipes, or the bursting, leaking or running of any
tank, washstand, water closet, waste pipe or other articles in, above, upon or
about the building or premises, or for damage occasioned from or by water,
snow, or ice being upon or about the premises (except on the roof of the
building) unless caused by the negligence or intentional act of Lessor, its
agents or employees.
Lessor and Lessee hereby expressly waive any cause of action or right of
recovery which either may have hereafter against the
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other for any loss or damage to the premises, or to the contents thereof, from
all claims and liabilities arising from or caused by any hazard that could be
covered by a standard fire insurance policy with extended coverage and "all
risk" endorsement on the premises or on the contents thereof, to the extent of
any amounts actually received or which could have been received had the proper
insurance been in place, and each party hereto shall obtain a waiver from any
insurance carrier with which it carries insurance covering the premises, or the
contents thereof, releasing its subrogation rights as against the other party,
and upon request by either party evidence of said waiver shall be furnished by
each party hereto to the other party.
Lessee agrees to save and hold Lessor harmless from any claim, damage,
liability, or expense arising from any injury (including death) to persons or
damage to property occurring in, on or about the premises, except to the extent
caused by the negligence of the Lessor, its agents and employees. In the event
of the negligence of more than one party, the parties shall be liable to one
another for their proportionate share.
14. DAMAGE BY CASUALTY:
If, during the term hereof, or previous thereto, the premises or any
Building of which the premises are a part shall suffer damage by fire,
explosion, providential means or any other casualty to the extent that the
premises or Building cannot reasonably be repaired within 90 days after date of
such damage, in the judgment of Lessor and Lessee, of if they cannot agree, a
mutually agreeable third party qualified in the construction
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industry in or about Wake County, North Carolina, or to such an extent that
under the then existing laws, orders, ordinances or other public requirements
the same cannot be repaired to substantially the same form and with
substantially the same materials as before such damage, then the term hereby
created shall, at the option of either party exercised by written notice not
later than sixty (60) days after the occurrence of such casualty, terminate as
of the date of such damage and rent shall cease as of the date of such damage
(with proportionate refund of any prepayment) on condition Lessee forthwith
surrenders the premises to Lessor. If this Lease is not so terminated, then
Lessor shall repair the premises as soon as practicable with due diligence. A
maximum of 120 days shall be considered a reasonable time in which to complete
repairs barring any extraordinary circumstances or matters beyond the control
of Lessor, placing the same in as good condition as they were just before such
damage, and rent shall xxxxx pro rata and in proportion to untenantability of
the premises (or if the undamaged portion is not reasonably usable for Lessee's
purposes pending the restoration of the Building, all rent shall xxxxx) from
the time of such damage until restoration of the premises by Lessor. It is
further agreed that the period for reconstruction shall be extended for such
time during which strikes, riots, civil commotion, governmental intervention,
acts of God, or any other contingency beyond Lessor's control shall delay the
construction. In case of such damage, whether this Lease is thereby terminated
or not, Lessee shall remove all of the rubbish
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and debris of Lessee's property within sixty (60) days after written request
by Lessor, and if this Lease is not thereby terminated, Lessee shall not do
anything to hinder or delay Lessor's work of repair, and will cooperate with
Lessor in such work. Lessor shall not be liable for inconvenience to Lessee by
making repairs to any part of the premises or Building, nor for the
restoration of any improvements made by Lessee, nor for the restoration of any
property of Lessee. Notwithstanding anything herein to the contrary, in the
event the holder of any indebtedness secured by a mortgage or deed of trust
covering the premises requires that the insurance proceeds be applied to such
indebtedness, then Lessor shall have the right to terminate this Lease by
delivering written notice of termination to Lessee, whereupon all rights and
obligations hereunder shall cease and terminate with proportionate refund of
any prepayment.
15 DEFAULT:
If there be default in payment of any rent or in any other of Lessee's
obligations hereunder, or if the premises be vacated by Lessee without adequate
provision for building security and maintenance, and if such default or
condition shall continue after ten (10) days' notice, in writing, from Lessor
to Lessee to make good such default or correct such condition, Lessor may, at
Lessor's option, at any time thereafter while such default or condition
continues, without further notice or demand, declare this Lease terminated and
enter upon and repossess the premises free of this Lease; or Lessor may, at
Lessor's option, enter upon and repossess the premises as aforesaid or receive
the keys
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thereto, Lessee hereby acknowledging that the Lessor has received same as Agent
of the Lessee and is authorized to re-let the premises for the balance of the
term of this Lease, for a shorter or longer term, at such rental as Lessor
deems fit, and may receive the rents therefor, applying the same first to the
payment of the reasonable expense of such re-letting and second to the payment
of rent due and to become due under this Lease, Lessee remaining liable for and
agreeing hereby to pay Lessor any deficiency. Lessor shall make reasonable
efforts to re-lease the premises. Listing the premises for re-lease with a
reputable broker shall be considered a reasonable effort, but all reasonable
broker's commissions shall be at Lessee's expense. Provided, however, if any
such default be other than for non-payment of money and it would take more than
thirty (30) days to cure the same, Lessor shall not be entitled to terminate
this Lease or enter upon the premises for such default if Lessee begins the cure
of such default within said thirty (30) days and prosecutes the cure thereof
with due diligence to completion. If any proceedings under the present or any
other Bankruptcy Code, including but not being limited to voluntary or
involuntary straight bankruptcy proceedings, arrangements or reorganizations,
be instituted by or against Lessee, or if a receiver or trustee be appointed for
or ordered to dispose of Lessee's business or property, or if Lessee makes any
assignment or conveyance for benefit of creditors, the same shall constitute a
breach of this Lease and Lessor shall forthwith on such breach have the right of
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termination, entry and repossession as above, in this paragraph set forth.
16. EMINENT DOMAIN:
If the premises or any substantial part thereof shall be taken by any
competent authority under the power of eminent domain, or a conveyance thereof
be made in lieu of or in anticipation of the exercise of such power, or if the
premises or any substantial part thereof be acquired for any public or
quasi-public use or purpose, the term of this Lease shall cease and terminate
upon the date when the possession of said premises or the part thereof so taken
shall be required for such use or purpose and without apportionment of the
award, and Lessee shall have no claim against Lessor for the value of any
unexpired term of this Lease. If any condemnation proceeding shall be
instituted in which it is sought to take or damage any part of Lessor's
building or the land under it, Lessor or Lessee shall have the right to cancel
this Lease after having given written notice of cancellation to the other not
less than ninety (90) days prior to the date of cancellation designated in the
notice. Rent at the then current rate shall be apportioned as of the date of
the termination. No money or other consideration shall be payable by the Lessor
to the Lessee or by Lessee to the Lessor for the right of cancellation and the
Lessee shall have no right to share in the condemnation award or in any
judgment for damages caused by the taking. Nothing in this paragraph shall
preclude an award being made to Lessee for loss of business or depreciation to
and cost of removal of equipment or fixtures.
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17. UTILITIES:
Lessee shall contract in its own name and pay for all charges for water,
sewer charges, gas heat, oil, electricity, fuel, telephone and other utilities
used in or serving the premises during the term of this Lease.
18. MECHANIC'S LIENS:
Lessee will not permit any mechanic's liens, or other liens, to be placed
upon the premises or any building or improvement thereon during the term hereof
as a result of Lessee's actions, and in case of the filing of any such lien,
Lessee will promptly pay same; provided, however, that Lessee shall have the
right to contest the validity or amount of any such lien upon posting security
with Lessor which in Lessor's sole reasonable judgment is adequate to pay and
discharge any such lien in full if held valid. Lessee shall have sixty (60)
days after filing to pay the lien or post security as provided. If default in
payment thereof shall continue for thirty (30) days after notice thereof from
Lessor to Lessee, Lessor shall have the right and privilege at Lessor's option
of paying the same or any portion thereof without inquiry as to the validity
thereof, and any amounts so paid, including expenses and interest, shall be
immediately due by Lessee to Lessor and shall be paid promptly upon
presentation of xxxx therefor.
Lessor covenants that it will not permit any mechanic's liens to be placed
on the premises, and that, should such lien be recorded against the premises,
Lessor will ensure its removal not
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later than thirty (30) days after written demand therefor is made upon Lessor by
Lessee.
19. MORTGAGES AND ESTOPPEL CERTIFICATES:
This Lease shall be subject and subordinate to any mortgage or deed or
trust now or at any time hereafter constituting a lien or charge upon the
Premises or the improvements situated thereon; provided that Lessee and the
holder of such mortgage or deed of trust shall have entered into a
non-disturbance and attornment agreement in form and content reasonably
acceptable to such parties. Subject to the foregoing, Lessee shall at any time
hereafter on demand execute any instruments, releases or other documents which
may be required by any such mortgagee for the purpose of subjecting and
subordinating this Lease to the lien of any such mortgage.
Lessee shall at any time and from time to time, upon not less than thirty
(30) days' prior request by Lessor, execute, acknowledge and deliver to Lessor,
a statement in writing certifying that (i) this Lease is unmodified and in full
force and effect (or if there have been modifications that the same is in full
force and effect as modified and identifying the modifications), (ii) the dates
to which the base rent and other charges have been paid, and (iii) so far as
the person making the certificate knows, Lessor is not in default under any
provisions of this Lease (or if there are defaults, specifying the defaults).
It is intended that any such statement may be relied upon by any person
proposing to acquire Lessor's interest in this Lease or the premises, or any
prospective mortgagee of, or
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assignee of any mortgage upon such interest or the premises.
20. ENVIRONMENTAL COVENANTS AND WARRANTIES:
Compliance with Law: (a) Lessee, at Lessee's expense, shall comply with
all applicable federal, state and local laws, regulations, or ordinances
pertaining to air and water quality, hazardous materials (as hereinafter
defined), waste disposal, air emissions, and other environmental matters, and
with any direction of any public officer or officers, pursuant to law, which
shall impose any duty upon Lessor or Lessee with respect to any of the
foregoing.
(b) Lessor shall deliver a Phase 1 Environmental Audit prepared by a
professional registered engineer with environmental expertise, dated not
earlier than August 1, 1996, to Lessee within eight (8) weeks of execution by
Lessee of this lease. As used in this paragraph, the Phase I Environmental
Audit shall be in accordance with the provisions set forth in 42 U.S.C.
9601(35)(B) and shall also consist of a visual inspection of the premises,
including any equipment and machinery thereon and all building components or
materials used therein, an inquiry into past occupants and uses of the
premises, a search of all records pertaining to environmental conditions on
the premises, including any reports generated for or from any governmental
authority, notices of warnings, complaints and violations of applicable
environmental statutes, rules or regulations, and applicable environmental
statutes, rules or regulations, and a visual inspection of all properties
adjoining the premises, and any
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other investigation deemed consistent with good commercial practices.
Lessee shall, upon written notice to Lessor, have the right thereafter to
terminate this Lease if the Phase I Environmental Audit shows conditions on the
Land violative of environmental laws, rules, regulations or ordinances and
which cannot with due diligence by Lessor be corrected prior to Lessee's
initial occupation of the premises. Upon delivery of the Phase I Environmental
Audit, Lessor will represent that to the best of Lessor's information and
belief said Phase I Environmental Audit is complete, true and accurate; that to
the best of Lessor's information and belief there has been no change in the
condition of the premises since the date of said Phase I Environmental Audit;
that except as may be reflected in said Phase I Environmental Audit, Lessor has
no knowledge of any environment hazard or pollution on the premises, now or in
the past; and that to the best of Lessor's information and belief, the premises
are in full compliance with all legal requirements of every sort whatsoever.
Lessor warrants that neither it nor any person or entity under its control will
take any action which will cause the premises or any part thereof to be
materially in violation of any applicable statute, ordinance or regulation for
more than thirty (30) days after Lessor receives notice of such violation.
21. INDEMNIFICATION:
(a) Lessee shall indemnify, defend, and hold Lessor harmless from any and
all claims, judgments, damages, penalties, fines, costs, liabilities, or losses
(including, without
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limitation, diminution in value of the premises, damages for the loss or
restriction on use of rentable or usable space or of any amenity of the
premises and reasonable sums paid in settlement of claims, reasonable
attorney's fees, reasonable consultant fees, and reasonable expert
fees) which arise during or after the Lease term as a result of contamination
by hazardous material as a result of Lessee's use or activities, or of Lessee's
agents or contractors. This indemnification of Lessor by Lessee includes,
without limitation, costs incurred in connection with any investigation of site
conditions or any cleanup, remedial, removal, or restoration work required by
any federal, state, or local government agency or political subdivision because
of hazardous material present in the soil or groundwater on or under the
premises as a result of Lessee's use or activities, or Lessee's agents or
contractors, or which would have with reasonable care exerted by Lessee not have
occurred. Without limiting the foregoing, if the presence of any hazardous
material on the premises caused or permitted by Lessee or its agents or
contractors results in any contamination of the premises, Lessee shall promptly
take all actions at its sole expenses as are necessary to return the premises
to the condition existing prior to the release of any such hazardous material
to the premises, provided that Lessor's approval of such actions shall first be
obtained, which approval shall not be unreasonably withheld so long as such
actions would not potentially have any material adverse long-term or short-term
effect on the premises. The
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foregoing indemnity shall survive the expiration or earlier termination of this
Lease.
(b) At the expiration of this Lease or any extension hereof, Lessee shall
select, said selection to be mutually agreeable to Lessor, a professional
registered engineer with environmental expertise to conduct, at Lessee's sole
expense, a Phase I Environmental Audit of the premises. As used in this
Paragraph, a Phase I Environmental Audit shall be in accordance with the
provisions set forth in 42 U.S.C. 9601(35)(B) and shall also consist of a
visual inspection of the premises, including any equipment and machinery thereon
and all building components or materials used therein, an inquiry into past
occupants and uses of the premises, a search of all records pertaining to
environmental conditions on the premises, including any reports generated for
or from any governmental authority, notices of warnings, complaints and
violations of applicable environmental statutes, rules or regulations, and
applicable environmental statutes, rules or regulations, and a visual inspection
of all properties adjoining the premises, and any other investigation deemed
consistent with good commercial practices.
(c) As used herein, the term "hazardous material" means any hazardous or
toxic substance, material, or waste, including, but not limited to, those
substances, materials, and wastes listed in the United States Department of
Transportation Hazardous Materials Table (49 CFR 172.101) or by the United
States Environmental Protection Agency as hazardous substances (40 CFR Part
302) or hazardous wastes (40 CFR Part 261), petroleum
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products, asbestos, or such other substances, materials, and wastes that are or
become regulated under any applicable state or local law.
(d) Anything in this Lease to the contrary notwithstanding Lessee shall not
be responsible for any costs or expenses caused by any condition of the
premises existing before the date of this Lease or created after the
termination of this Lease, or created by any person or entity other than
Lessee, its agents or contractors, except where by reasonable care, Lessee
could have prevented such occurrence.
22. OPTION TO PURCHASE:
Lessor grants to Lessee an irrevocable option to purchase the premises on
the terms and conditions set forth hereafter.
(a) Lessee shall have the right to exercise this option at any time during
the term of this lease or extension thereof by mailing six months written
notice of its exercise to Lessor.
(b) Exercise of its option rights shall entitle and require Lessee to
purchase the premises and to close within thirty (30) days following the later
to occur of (i) the date six months after exercise of the option; or (ii) the
establishment of the purchase price pursuant to the terms of subsection (c)
below. If the closing date occurs after the expiration of the term of the
Lease, inclusive of any and all extensions thereof, then Lessee shall be
permitted to hold over the premises from the date of the expiration of the term
of the Lease until the closing date upon the same terms and conditions set
forth in this Lease and at the same monthly rental as that paid in the last
month of the term of
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the Lease. Lessor will convey title by general warranty deed with English
covenants of title, but subject to no exceptions to title other than as set
forth in the policy of title insurance reviewed and approved by Lessee pursuant
to the terms set forth in Paragraph 23 below.
(c) The purchase price for the premises shall be determined as follows:
Lessor and Lessee shall each select an appraiser, each of whom shall be a duly
licensed or legally authorized commercial real estate appraiser with a minimum
of three (3) years' experience in the Raleigh, North Carolina commercial real
estate market. The appraisers shall be instructed to complete the appraisal
procedure and to submit their written determinations to Lessor and Lessee
within thirty (30) days after their selection. The purchase price shall be the
higher of: (1) the two appraisals, but not more than 110% of the lowest
appraisal; or (2) $3.2 million plus the cost of all changes, additions,
improvements and expansions that are financed by the Lessor pursuant hereto,
except as listed on the Exhibit A Contract Specifications.
(d) Should any part of the premises be condemned prior to Lessee's
exercise of its option rights hereunder, all proceeds from said condemnation
shall belong to Lessor, and Lessee's option right shall remain in full force
and effect as to the remainder of the premises. Should any part of the premises
be condemned after Lessee's exercise of its option rights hereunder, Lessor
shall tender to Lessee any offer for the premises, and the defense of any
condemnation suit; Lessee shall be entitled to all
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proceeds from said condemnation; and Lessee shall be obligated to proceed to
closing as to the remainder of the premises.
(e) Lessor agrees that it will not take any action regarding the premises
which would impair the value of Lessee's option rights. Lessor agrees that
Lessee shall be entitled to have specific performance of its option rights
herein granted; that those rights shall be binding on Lessor and Lessor's
successors and assigns; and that those rights shall be covenants running with
the Land. Upon request, Lessor agrees to execute and deliver to Lessee a
memorandum of option in such form as to be recordable among the land records of
Wake County North Carolina.
(f) Upon Lessee's exercise of the option rights herein granted, and
ascertainment of the purchase price and date of closing, the parties agree to
execute and deliver to each other duplicate originals of an appropriate
contract of purchase and sale, embodying the terms set forth herein and such
other terms as are usual, necessary and appropriate to the transaction.
23 TITLE:
Within thirty (30) days following the date of this Lease, Lessor shall
deliver to Lessee a copy of a current owner's policy of title insurance,
together with a copy of all exceptions to title noted therein, issued by a
title company satisfactory to Lessor and Lessee insuring Lessor's fee simple
title to the Land. Upon receipt of such copy, Lessee shall have five (5)
business days to review and approve the title to the Land. Lessee shall have
the right to terminate this Lease, immediately upon written
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notice to Lessor if such title insurance policy discloses any matter or
exception which would materially and adversely affect Lessee's use and quiet
enjoyment of the premises for the purposes set forth in this Lease.
24. The submission of this Lease to Lessee shall not be construed as an
offer and Lessee shall not have any rights with respect thereto unless Lessor
executes a copy of this Lease and delivers the same to Lessee; provided,
however, that if Lessor shall not have executed and delivered a copy of this
Lease to Lessee by October 30, 1996, then this Lease shall be null and void and
of no further force and effect and neither party shall have any rights
thereunder.
25. This Lease shall be amended to conform to any reasonable requests of
Lessor's lender or lenders so long as such amendment or amendments to not
adversely affect Lessee's rights pursuant hereto or increase Lessee's duties
with respect hereto.
26. Lessor may be required by contractual obligation to purchase an
additional 1.43 acres adjoining the present site for $20,000.00. In the event
that occurs, the purchase price of $20,000.00 shall be considered a Lessee
requested expansion, pursuant to paragraph 1(d) and the rent shall be
re-calculated accordingly, and the additional 1.43 acres shall be considered
part of the leased Premises.
27. Lessor's return on its investment is based upon the initial
improvements being financed through Industrial Revenue Bonds which are Federal
and State income tax exempt. Maintenance of the tax exempt status of the
financing requires certain
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actions and forebearances on Lessee's part. Lessee agrees to do whatever is
required of it to maintain the tax exempt status of Lessor's financing. Should
the tax exempt status of Lessor's financing be lost except due solely to the
act or actions of Lessor, and Lessor's cost of financing increases as a result,
then Lessee shall pay to Lessor, as additional rent, such sums as are necessary
to reimburse Lessor for any diminishment in its return on its investment
resulting from the increase in Lessor's cost of financing. In the event that
tax exempt financing is used for any Lessee required improvements, pursuant to
paragraph 10, then the foregoing shall apply to that financing as well.
28. WAIVER:
A waiver by Lessor or Lessee of any default or breach hereunder shall not
be construed to be a continuing waiver of such default or breach, not as a
waiver or permission, expressed or implied, of any other or subsequent default
or breach. All waivers must be in writing and no course of conduct shall
establish a custom or confer any rights upon Lessee or Lessor.
29. NOTICES:
Unless otherwise designated by like notice in writing by either party to
the other, notices required herein shall be sent by registered or certified
mail or by express overnight delivery as follows:
To Lessor: Agracel, Inc.
X.X. Xxx 0000
Xxxxxxxxx, Xxxxxxxx 00000
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Copy to: Q. Xxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxx, Xxxxxxxx 00000
To Lessee: Xxxxxx Metalcraft Co.
0000 Xxxx Xxxxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxx, Xxxxxxxx 00000-0000
Notices so mailed or delivered shall be deemed duly given upon deposit with the
U.S. Postal service or overnight courier, as applicable, postage or delivery
fee prepaid, addressed as above indicated.
30. SUCCESSORS:
All of the terms, covenants and conditions of this Lease shall apply and
inure to the benefit of, and be binding upon the parties hereto, and upon their
respective successors in interest and legal representatives, except as
otherwise provided herein.
31. QUIET POSSESSION:
Lessor covenants with Lessee that said Lessee, on paying the rent herein
required to be paid and performing the covenants herein contained, shall and
may peaceably and quietly have, hold and enjoy the premises during the term of
this Lease.
32. PROCUREMENT OF THIS LEASE:
Each of the parties hereto certifies that no broker or leasing agent
independent of the parties has been involved in the negotiation of this Lease.
33. ATTORNEY'S FEES:
If any action at law or in equity shall be brought to enforce any of the
covenants, terms or conditions of this Lease, the prevailing party shall be
entitled to recover from the other
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party, as part of the prevailing party's costs, reasonable attorney's fees, the
amount of which shall be fixed by the court, and shall be made a part of any
judgment or decree rendered.
34. LEASE CONSTITUTES ENTIRE CONTRACT:
Each party to this Lease acknowledges that this Lease constitutes all of
the agreements between the parties hereto, and that no representations,
warranties, or other covenants are included except as set forth herein, and
this Lease shall not be recordable, but a "Memorandum of Lease" in usual and
customary form will be executed and acknowledged by the parties, upon request
of either party, which may be recorded.
IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease or have
caused it to be executed by this respective authorized representatives the day
and year first above written. Each of the persons executing this Lease
represent that they are authorized to execute the same on behalf of the party
for whom they have executed hereafter.
LESSEE
XXXXXX METALCRAFT CO.
By: /s/ Xxxxx X. Xxxxxxxxx
-----------------------------
Its Vice President of Finance
ATTEST:
By:
------------------
Its Vice President
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LESSOR
AGRACEL INC.,
By: /s/ [SIG]
-------------------------
Its President
ATTEST:
By: /s/ [SIG]
-------------------------
Its Vice President
STATE OF ILLINOIS )
) ss.
COUNTY OF TAZEWELL )
I, the undersigned, a Notary Public, in and for said county, in the state
aforesaid, DO HEREBY CERTIFY that Xxxxx X. Xxxxxxxxx, personally known to me to
be the Vice President of Xxxxxx Metalcraft Co., and Xxxxx X. Xxxxxxxx,
personally known to me to be the President of said corporation, and personally
known to me to be the same persons whose names are subscribed to the foregoing
instrument, appeared before me this day in person and acknowledged that as such
Vice Presidents they signed and delivered the said instrument as Vice Presidents
of said corporation, and caused the corporate seal of said corporation to be
affixed thereto, pursuant to authority given by the Board of Directors of said
corporation, as their free and voluntary act and as the free and voluntary act
and deed of said corporation, for the uses and purposes therein set forth.
Given under my hand and notarial seal this 6th day of November, 1996.
/s/ Xxxxxx X. Xxxxxx
------------------------
Notary Public
My commission expires:
July, 1997
"OFFICIAL SEAL"
Xxxxxx X. Xxxxxx
Notary Public, State of Illinois
My Commission Expires 07/08/97
