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EXHIBIT (10)(ab)
LEASE AGREEMENT
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THIS LEASE AGREEMENT, entered into as of the 31st day of March, 2000, is by and
between XXXX XXXXX, as Trustee of the Xxxx Xxxxx Revocable Living Trust u/a/d
April 7, 1988 (the "Landlord"), and ALKAR STEEL CORPORATION, (the "Tenant"), a
Michigan corporation whose address is 29685 Xxxxxxxx, Xxxxxxxxx, Xxxxxxxx 00000.
WITNESSETH:
1. LEASED PREMISES.
Landlord, in consideration of the rents to be paid by Tenant and the
covenants and agreements hereinafter set forth to be performed by Tenant, does
hereby agree to lease unto Tenant all of that certain land located in the City
of Roseville, County of Macomb, State of Michigan, and described with
particularity in Exhibit "A" attached hereto and made a part hereof, together
with all improvements and appurtenances thereto (the "Leased Premises").
2. TERM OF LEASE.
The term of this Lease shall be for three (3) years commencing
on the date hereof ("Commencement Date"). If the Commencement Date is not on the
first day of a month, the Tenant shall pay rent for the fractional month on a
per diem basis (calculated on the basis of a thirty (30) day month) until the
first day of the month when the term hereunder commences; and thereafter the
minimum rent shall be paid in equal monthly installments on the first day of
each and every month in advance.
3. RENT.
Tenant covenants to pay the rent herein reserved and all other sums
which may become due hereunder, or be payable by the Tenant hereunder, at the
times and in the manner provided in this Lease.
a. BASE RENT. Tenant covenants to pay to Landlord as base rent for the
Leased Premises, during each year of the term of the Lease, the annual sum of
Three Hundred Thousand and 00/100 ($300,000.00) Dollars, payable in advance, in
equal consecutive monthly installments of Twenty-five Thousand and 00/100
($25,000.00) Dollars each. Each such monthly installment shall be due and
payable in advance on the first day of each calendar month during the term
hereof, without prior notice and demand therefor.
b. ADDITIONAL RENT. In addition to said rent and other sums to be paid
by Tenant as hereinafter stated, Tenant shall pay or reimburse Landlord for any
privilege, sales, license, use, excise or other tax (excluding federal or state
income taxes) at any time imposed upon or measured by the rent payments and
other charges payable by Tenant hereunder, as levied or assessed by the State of
Michigan, the City of Roseville, or by any governmental authority on account of
this Lease or the rental and other charges payable hereunder.
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4. UTILITIES.
Tenant agrees to pay all charges made against the Leased Premises for
gas, heat, water, electricity, sewage disposition, telephone, power, air
conditioning and ventilating, janitorial, landscaping and all other services or
utilities supplied to the Leased Premises during the term of this Lease as the
same shall become due and payable.
5. REPAIRS, MAINTENANCE AND ACCEPTANCE OF LEASE PREMISES.
a. ACCEPTANCE OF LEASED PREMISES. Landlord hereby delivers to Tenant,
and Tenant hereby accepts from Landlord, possession of the Leased Premises.
Tenant represents and warrants that it has fully examined the Leased Premises,
accepts the Leased Premises in an "as is" condition without any representation
or warranty, express or implied, in fact or by law, (except for those
specifically stated in this document or the Stock Purchase Agreement between
Landlord and Tenant dated March 20, 2000 which relate to the Leased Premises) by
Landlord (including without limiting the generality of the forgoing, that the
Leased Premises is or has ever been suitable for any particular purpose, use or
operation) and without recourse to Landlord as to the physical condition. Tenant
affirmatively acknowledges that no representations or warranties have been made
by Landlord or Landlord's agents and that Tenant is relying solely upon its own
independent investigation of the Leased Premises with respect to execution and
acceptance of this Lease.
b. TENANT'S OBLIGATIONS. Subject to the provisions of Paragraph 10
hereof, Tenant, at Tenant's sole expense, shall keep and maintain in good order,
condition and repair the Leased Premises and every part thereof, including
without limitation the foundation, exterior walls and the exterior roof of the
Leased Premises, all plumbing, heating, air conditioning, ventilating,
electrical and lighting facilities and equipment within the Leased Premises and
all sidewalks, landscaping, driveways, parking lots, fences and signs located in
the areas which are adjacent to and included with the Leased Premises. Tenant
expressly waives the benefits of any statute now or hereafter in effect which
would otherwise afford Tenant the right to make repairs at Landlord's expense or
to terminate this Lease because of Landlord's failure to keep the Leased
Premises in good order and condition and repair.
c. SURRENDER OF LEASED PREMISES. Upon the expiration or earlier
termination of this Lease, Tenant shall surrender the Leased Premises in the
same condition as received, ordinary wear and tear and damage by fire,
earthquake, act of God or the elements alone excepted. Tenant, at its sole cost
and expense, agrees to repair any damage to the Leased Premises caused by or in
connection with the removal of any articles of personal property, business or
trade fixtures, machinery, equipment, cabinetwork, furniture, movable partition,
or permanent improvements or addition, including without limitation thereto,
repairing the floor and patching and painting the walls where required by
Landlord to Landlord's reasonable satisfaction. Tenant shall indemnify the
Landlord against any loss or liability resulting from delay by Tenant in so
surrendering the Leased Premises, including without limitation, any claims made
by any succeeding tenant founded on such delay.
d. LANDLORD'S REMEDIES. In the event Tenant fails to perform Tenant's
obligations under this Xxxxxxxxx 0, Xxxxxxxx shall give Tenant notice to do such
acts as are reasonably required to so maintain the Leased Premises. If Tenant
fails to do the work and diligently
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prosecute it to completion, then Landlord shall have the right (but not the
obligation) to do such acts and expend such funds at the expense of Tenant as
are reasonably required to perform such work. Any amount so expended by Landlord
shall be paid by Tenant promptly after demand with interest at ten (10%) percent
per annum from the date of such work. Landlord shall have no liability to Tenant
for any damage, inconvenience or interference with the use of the Leased
Premises by Tenant as a result of performing any such work.
6. ALTERATIONS AND REMOVAL.
a. ALTERATIONS. Tenant shall not, without Landlord's (and/or Landlord's
lender's consent, if required under any mortgages or other loan documents) prior
written consent, (which shall not be unreasonably withheld), make any
alterations, additions, improvements or utility installments in, on or about the
Leased Premises. Prior to Landlord granting its consent, Tenant shall provide
Landlord with detailed plans and specifications of any proposed alterations,
additions, improvements (including but not limited to installation or
modification of signage, landscaping, and interior configuration). Landlord
shall have a reasonable period, in no event to be shorter than fifteen (15) days
to review such plans and specifications. As a condition to giving such consent,
Landlord may require that Tenant agree to remove any such alterations,
additions, improvements or utility installations at the expiration of the term
and to restore the Leased Premises to their prior condition.
b. REMOVAL. Unless Landlord requires their removal, as set forth in
Paragraph 6(a), all alterations, additions, improvements and utility
installations which may be made on the Leased Premises, shall at the expiration
or earlier termination of the Lease become the property of Landlord and remain
upon and be surrendered with the Leased Premises.
7. TAXES AND ASSESSMENT.
a. REAL PROPERTY TAXES. Tenant shall pay all real property taxes and
assessments levied against the Leased Premises during the term of this Lease.
All such payments shall be made at least twenty (20) days prior to the
delinquency date of such payment. Tenant shall promptly furnish Landlord with
satisfactory evidence that such taxes have been paid. If Tenant fails to pay any
such taxes, Landlord shall have the right but not the obligation to pay same, in
which case Tenant shall repay such amount to Landlord with Tenant's next rent
installment together with interest at the rate of ten (10%) percent per annum.
In the event Landlord is required or elects to pay any sums into an escrow
account for the payment of taxes, Tenant shall pay monthly, as additional rent
hereunder, 1/12 of the estimated yearly costs of taxes and special assessments.
The amount of the estimated payment shall be reasonably determined by Landlord
and may be adjusted from time to time so that the amount received shall
approximate either the total sum required annually for taxes and special
assessments or the amount required to be placed in escrow by Landlord, whichever
is greater. Any deficiencies or overages shall be adjusted between the Landlord
and Tenant on an annual basis.
b. PRORATION. In the event any such real property taxes paid by Tenant
cover any period of time prior to commencement or after the expiration of the
term of this Lease, Tenant's share of such taxes shall be equitably prorated to
cover only the period of time within the fiscal tax
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year during which this Lease is in effect, and Landlord shall reimburse Tenant
to the extent required.
c. DEFINITION OF REAL PROPERTY TAX. As used in this Lease, the term
"real property tax" shall include any form of assessment, levy, penalty or tax
(other than inheritance, estate, net income or franchise taxes), imposed by any
authority having the direct or indirect power to tax, including any city,
county, state or federal government or any school, agricultural, lighting,
drainage or other improvement district thereof, whether such tax is (a) upon,
allocable to or measured by the area of the Leased Premises or the rental
payable hereunder, including without limitation any gross income tax or excise
tax levied by the State, any political subdivision thereof, city or Federal
Government with respect to the receipt of such rental; or (b) upon or with
respect to the possession, leasing, operating, management, maintenance,
alteration, repair, use or occupancy by Tenant of the Leased Premises or any
portion thereof; or (c) upon or measured by the value of Tenant's personal
property, equipment or fixtures located in the Leased Premises; or (d) upon this
transaction or any document to which Tenant is a party creating or transferring
an interest or an estate in the Leased Premises; or (e) whether or not now
customary or within the contemplation of the parties.
d. PERSONAL PROPERTY TAXES. Tenant shall pay prior to delinquency all
taxes assessed against and levied upon trade fixtures, furnishings, equipment
and all other personal property of Tenant contained in the Leased Premises or
elsewhere. When possible, Tenant shall cause said trade fixtures, furnishings,
equipment and all other personal property to be assessed and billed separately
from the real property of the Landlord.
8. USE AND OCCUPANCY.
It is understood and agreed between the parties that the Leased
Premises during the continuance of this Lease shall be used and occupied for
office, warehouse, distribution and manufacturing in connection with Tenant's
business. Tenant agrees, at its own expense, to obtain all approvals,
certificates, or permits of every kind and nature, including a certificate of
occupancy, that may be required in order for Tenant to occupy and use the Leased
Premises. Tenant agrees that it will comply with and not use or permit any
person to use the Leased Premises or any part thereof for any use or purpose in
violation of the laws of the United States, the State of Michigan, the
ordinances or other regulations of the municipality in which the Leased Premises
is located, or of any other lawful authorities, or the building and use
restrictions in effect covering the Leased Premises. During the term of this
Lease, Tenant will keep the Leased Premises and every part thereof in a clean
and wholesome condition and generally will comply with all lawful health and
police regulations.
Neither Tenant nor its agents, assigns, subtenants, employees or
contractors shall cause or permit the use, storage, generation or disposal of
(or engage in the business of storing or disposing of) or release or cause the
release of any hazardous wastes, petroleum products, contaminants, oils,
radioactive or other materials in, under or on the Leased Premises, the removal
of which is required or the maintenance of which is regulated, prohibited or
penalized by any present and future ordinances, requirements, orders,
directives, rules and regulations of the federal, state, county and city
governments and of any other governmental authorities having appropriate
jurisdiction ("Toxic Materials"), and the Leased Premises shall at all times be
kept free from any
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such Toxic Materials. Tenant further agrees to indemnify and hold Landlord
harmless from and against any and all claims, actions, damages, losses,
liabilities and expenses, including, but not limited to attorney's or
engineering fees, incurred by Landlord either as a result of Tenant's breach of
the covenants contained in this Paragraph 8 or in enforcing the foregoing right
to indemnification.
9. INDEMNITY AND LIABILITY INSURANCE.
a. INDEMNITY. Tenant shall indemnify and hold Landlord harmless from
and against any and all claims of liability for any injury or damage to any
person or property arising from Tenant's use of the Leased Premises, or from the
conduct of Tenant's business, or from any activity, work or thing done,
permitted or suffered by Tenant in or about the Leased Premises or elsewhere.
Tenant shall further indemnify and hold Landlord harmless from and against any
and all claims arising from any breach or default in the performance of any
obligation on Tenant's part to be performed under this Lease, or arising from
any negligence of Tenant or Tenant's agents, contractors or employees and from
and against all costs, attorney's fees, expenses and liabilities incurred in the
defense of any such claim or any action or proceeding brought thereon. In the
event any action or proceeding is brought against Landlord by reason of any such
claim, upon notice from Landlord, Tenant shall defend same at Tenant's expense
by counsel satisfactory to Landlord. Tenant, as a material part of the
consideration to Landlord, hereby assumes all risk of damage to property or
injury to persons, in, upon or about the Leased Premises arising from any cause
and Tenant hereby waives all claims in respect thereof against Landlord.
Additionally Tenant hereby indemnifies and agrees to hold harmless
Landlord from any cost, loss, cause of action, expense, claim or proceeding
whatsoever, including reasonable attorneys' fees of Landlord's choice, resulting
from or in any way related to the use, storage, generation, treatment or
disposition on the Leased Premises of any hazardous or environmentally regulated
substance, arising from any cause whatsoever, and all of which, (excluding those
substances absolutely necessary for Tenant's operation of its business) Tenant
covenants and agrees not to permit on the Leased Premises. For purposes of this
Lease, the term "hazardous or environmentally regulated substance" means any
substance the manufacture, use, treatment, storage, transportation, or disposal
of which is regulated by any law having as its object the protection of public
health, natural resources or the environment, including, by way of illustration
only and not as a limitation, the Resource Conservation and Recovery Act; the
Comprehensive Environmental Response, Compensation, and Liability Act; the Toxic
Substances Control Act; the Federal Water Pollution Control Act; the Clean Air
Act; and the Michigan Water Resources Commission Act. Tenant shall immediately
supply to Landlord a copy of the reports of any environmental audit or
investigation undertaken with respect to the Leased Premises, as well as any
notices, demands, inquiries or claims received from any person, entity or
governmental agency as a result of contamination or pollution alleged to be on
or emanating from the Leased Premises, and any reports or applications for
licenses, permits or approvals submitted by or on behalf of Tenant to any
environmental regulatory agency affecting the Leased Premises or adjacent
property.
b. EXEMPTION FROM LIABILITY. Landlord shall not be liable for injury to
Tenant's business or loss of income therefrom or for damage which may be
sustained by the person, goods, wares, merchandise or property of Tenant, its
employees, invitees, customers, agents or contractors or any other person in or
about the Leased Premises, caused by or resulting from fire,
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steam, electricity, gas, water or rain, which may leak or flow from or into any
part of the Leased Premises, or from the breakage, leakage, obstruction or other
defects of the pipes, sprinklers, wires, appliances, plumbing, air conditioning
or lighting fixtures of the same, whether the said damage or injury results from
conditions existing or arising upon the Leased Premises or from other sources or
places and regardless of whether the cause of such damage or injury or the means
of repairing the same is inaccessible to Tenant.
c. LIABILITY INSURANCE. Tenant shall, at Tenant's expense, procure and
maintain at all times during the term of this Lease a policy of comprehensive
public liability insurance insuring Landlord and Tenant against any liability
arising out of the ownership, use, occupancy, or maintenance of the Leased
Premises and appurtenant areas. Such insurance shall at all times be in an
amount of not less than Two Million ($2,000,000.00) Dollars for injury to or
death of any one person and One Million ($1,000,000.00) Dollars for damages
resulting from one casualty, and One Hundred Thousand ($100,000.00) Dollars
property damage insurance resulting from any one occurrence. Tenant shall
deliver said policies or certificates of insurance to the Landlord and upon
Tenant's failure so to do the Landlord may at his option obtain such insurance
and the cost thereof shall be paid as additional rent due and payable upon the
next ensuing rent day. The limits of such insurance shall not limit the
liability of Tenant.
d. PROPERTY INSURANCE. Tenant shall, at Tenant's expense, procure and
maintain at all times during the term of this Lease a policy or policies of
insurance covering loss or damage to the Leased Premises in such an amount as
Landlord shall reasonably request (exclusive of Tenant's trade fixtures and
equipment) providing protection against all perils included within the
classification of fire, boilers, extended coverage, vandalism, malicious
mischief, sprinkler leakage and special extended peril (all-risk). Such
insurance shall include "loss of rent" insurance throughout the term in an
amount adequate to cover the obligations of Tenant under this Lease. In the
event Landlord is required or elects to pay any sums into an escrow account for
the payment of insurance, Tenant shall pay monthly, as additional rent
hereunder, 1/12 of the estimated yearly costs of such insurance. The amount of
the estimated payment shall be reasonably determined by Landlord and may be
adjusted from time to time so that the amount received shall approximate either
the total sum required annually for insurance or the amount required to be
placed in escrow by Landlord, whichever is greater. Any deficiencies or overages
shall be adjusted between the Landlord and Tenant on an annual basis.
e. LANDLORD'S INSURANCE. Landlord may, but is not required, in its sole
discretion, to procure excess insurance that it deems appropriate to protect its
interests. Upon presentation to Tenant of invoices and proof of payment for any
such insurance coverage, Tenant, as Additional Rent, shall immediately reimburse
Landlord for the cost of any such insurance procured by Landlord.
f. INSURANCE CARRIER. All insurance required hereunder shall be with an
insurance carrier acceptable to Landlord. Tenant shall deliver to Landlord
certificates of insurance evidencing the existence and amount of such insurance
with loss payable clauses satisfactory to Landlord, provided that in the event
Tenant fails to procure and maintain such insurance, Landlord may (but shall not
be required to) procure same at Tenant's expense. No such policy shall be
cancelable or subject to reduction of coverage or other modification except
after thirty (30) days
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prior written notice to Landlord by the insurer. All such policies shall be
written as primary policies, not contributing with and not in excess of coverage
which the Landlord may carry. Tenant shall, within thirty (30) days prior to the
expiration of such policies, furnish Landlord with renewals or binders or
Landlord may order such insurance and charge the cost to Tenant, which amount
shall be payable by Tenant upon demand.
g. WAIVER OF SUBROGATION. Landlord and Tenant each hereby waive any and
all rights of recovery against the other or against the officers, employees,
agents and representatives of the other, on account of loss or damage occasioned
to such waiving party of its property or the property of others under its
control caused by fire, boiler, or any of the extended coverage risks described
above to the extent that such loss or damage is insured under any insurance
policy in force at the time of such loss or damage. The Tenant shall, upon
obtaining the policies of insurance required under this Lease, give notice to
the insurance carrier or carriers that the foregoing mutual waiver of
subrogation is contained in this Lease.
10. DAMAGE OR DESTRUCTION.
a. PARTIAL DAMAGE - INSURED. In the event the Leased Premises are
partially damaged (as distinguished from substantially damaged as defined
herein) by any casualty which is covered under an insurance policy required to
be maintained pursuant to Paragraph 9 hereof, then, provided that Tenant has
procured and maintained insurance as required under Paragraph 9 hereof, Landlord
shall repair such damage as soon as reasonably possible and to the extent
covered by such insurance and this Lease shall continue in full force and
effect.
b. PARTIAL DAMAGE - UNINSURED. In the event the Leased Premises are
damaged, except by a negligent or willful act or omission of Tenant, by any
casualty not covered under an insurance policy required to be maintained
pursuant to Paragraph 9 hereof, then Landlord may, at Landlord's option, either
(a) repair such damages as soon as reasonably possible at Landlord's expense, in
which event this Lease shall continue in full force, or (b) give written notice
to Tenant within thirty (30) days after the date of occurrence of such damage of
Landlord's intention to cancel and terminate this Lease as of the date of the
occurrence of the damage. In the event Landlord elects to terminate this Lease
pursuant to this Paragraph 10(b), Tenant shall have the right within ten (10)
days after receipt of the required notice to notify Landlord in writing of
Tenant's intention to repair such damage at Tenant's expense, without
reimbursement from Landlord, in which event this Lease shall continue in full
force and effect, and Tenant shall proceed to make such repairs as soon as
reasonably possible. If Tenant does not give such notice within the ten (10) day
period, this Lease shall be canceled and terminated as of the date of the
occurrence of such damage.
c. SUBSTANTIAL DAMAGE. If the Leased Premises are substantially
destroyed during the term of this Lease from any cause whether or not covered by
the insurance required under Paragraph 9 hereof (including any destruction
required by any authorized public authority), the Landlord may, at Landlord's
option, either (a) repair such damage or destruction within 180 days and this
Lease shall continue in full force and effect or (b) give written notice to
Tenant within thirty (30) days after the date of such occurrence of such damage
or destruction of Landlord's intention to cancel and terminate this Lease as of
the date of the occurrence of the damage. The
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term "substantially damaged" as used herein, shall mean the damage or
destruction of such a character that, in the ordinary course, cannot be
reasonably expected to be repaired within thirty (30) days from the time such
work would commence.
d. DAMAGE NEAR END OF TERM. If the Leased Premises are partially
destroyed or damaged during the last six (6) months of the term of this Lease or
the Lease as extended, either party may at either party's option cancel and
terminate this Lease as of the date of occurrence of such damage by giving
written notice to Landlord/Tenant of Landlord's/Tenant's election to do so
within thirty (30) days after the date of occurrence of such damage.
e. LANDLORD'S OBLIGATION. The Landlord shall not be required to repair
any injury or damage by fire or other cause, or to make any restoration or
replacement of any panelings, decorations, office fixtures, partitions,
railings, ceilings, floor covering, equipment, machinery or fixtures or any
other improvements or property installed in the premises by Tenant or at the
direct or indirect expense of Tenant. Tenant shall be required to restore or
replace same in the event of damage.
f. ABATEMENT OF RENT. If the Leased Premises are destroyed or damaged
and Landlord or Tenant repairs them pursuant to this Lease, the rent payable
hereunder for the period during which such damage and repair continues shall be
abated in proportion to the extent to which Tenant's use of the Leased Premises
is impaired. Except for abatement of rent, if any, Tenant shall have no claim
against Landlord for any damage suffered by reason of any such damage,
destruction, repair or restoration.
11. CONDEMNATION.
a. TERMINATION. If the Leased Premises or any portion thereof are taken
under the power of eminent domain, or sold by Landlord under the threat of the
exercise of said power (all of which is herein referred to as "condemnation"),
this Lease shall terminate as to the part so taken as of the date the condemning
authority takes title or possession, whichever occurs first. If more than fifty
(50%) percent of the floor area of any building on the Leased Premises, or more
than sixty five (65%) percent of the land area of the Leased Premises not
covered with buildings, is taken by condemnation, either Landlord or Tenant may
terminate this Lease, as of the date the condemning authority takes possession,
by notice in writing of such election within twenty (20) days after Landlord
shall have notified Tenant of the taking, or in the absence of such notice then
within twenty (20) days after the condemning authority shall have taken
possession.
b. RESTORATION. If this Lease is not terminated by either Landlord or
Tenant then it shall remain in full force and effect as to the portion of the
Leased Premises remaining, provided the rent shall be reduced in the proportion
that the floor area of the buildings taken within the Leased Premises bears to
the total floor area of the building. In the event this Lease is not so
terminated then Landlord agrees, at Landlord's sole cost, to restore the Leased
Premises to a complete unit of like quality and character as existed prior to
the condemnation as soon as reasonably possible. All awards for the taking of
any part of the Leased Premises or any payment made under the threat of the
exercise of power of eminent domain shall be the property of Landlord, whether
made as compensation for diminution of value of a leasehold or for the taking of
the fee or as severance damages; provided, however, that Tenant shall be
entitled to any award for
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loss of or damage to Tenant's trade fixtures and removable personal property. In
the event that this Lease is not terminated by reason of such condemnation,
Landlord shall, to the extent of severance damages received by Landlord in
connection with such condemnation, repair any damage to the Leased Premises
caused by such condemnation except to the extent that Tenant has been reimbursed
therefor by the condemning authority. Tenant shall pay any amount in excess of
such severance damages required to complete such repair.
12. ASSIGNMENT AND SUBLETTING.
a. LANDLORD'S CONSENT. Tenant shall not assign, transfer, mortgage,
pledge, hypothecate or encumber this Lease or any interest therein, and shall
not sublet the Leased Premises or any part thereof, without the prior written
consent of Landlord (which consent will not be unreasonably withheld) and any
attempt to do so without such consent being first had and obtained shall be
wholly void and shall constitute a breach of this Lease. Notwithstanding the
foregoing, Tenant may assign this lease as security to BNY Financial Corporation
or another Lender without the consent of Landlord, provided such lender executes
a standard attornment agreement prepared by Landlord.
b. NO RELEASE OF TENANT. No consent by Landlord to any assignment or
subletting by Tenant shall relieve Tenant of any obligation to be performed by
the Tenant under this Lease, whether occurring before or after such consent,
assignment or subletting. The consent by Landlord to any assignment or
subletting shall not relieve Tenant from the obligation to obtain Landlord's
express written consent to any other assignment or subletting. The acceptance of
rent by Landlord from any other person shall be deemed to be a waiver by
Landlord of any provision of this Lease or to be a consent to any assignment,
subletting or other transfer. Consent to one assignment, subletting or other
transfer shall not be deemed to constitute consent to any subsequent assignment,
subletting or other transfer.
13. SUBORDINATION.
a. SUBORDINATION. This Lease at Landlord's option shall be subject and
subordinate to the lien of any mortgages in any amount or amounts whatsoever now
or hereafter placed on or against the Leased Premises, or on or against
Landlord's interest or estate therein, without the necessity of the execution
and delivery of any further instruments on the part of Tenant to effectuate such
subordination. If any mortgagees shall elect to have this Lease prior to the
lien of its mortgage and shall give written notice thereof to Tenant, this Lease
shall be deemed prior to such mortgage, whether this Lease is dated prior or
subsequent to the date of said mortgage.
b. SUBORDINATION AGREEMENT. Tenant covenants and agrees to execute and
deliver upon demand, without charge therefore, such further instruments
evidencing such subordination of this Lease to such mortgagees as may be
required by Landlord. Tenant hereby appoints Landlord as Tenant's
attorney-in-fact, irrevocably, to execute and deliver any such agreements,
instruments, releases or other documents. Any such subordination agreement will
include a non-disturbance clause for Tenant.
c. QUIET ENJOYMENT. Landlord covenants and agrees with Tenant that upon
Tenant paying rent and other monetary sums due under the Lease and performing
its covenants and
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conditions, Tenant shall and may peaceably and quietly have, hold and enjoy the
Leased Premises for the term, subject, however, to the terms of the Lease and of
any of the aforesaid mortgages or deeds of trust described above.
d. ATTORNMENT. In the event of foreclosure or the exercise of the power
of sale under any mortgage made by the Landlord covering the Leased Premises,
the Tenant shall attorn to the purchaser upon any such foreclosure or sale and
recognize such purchaser as the Landlord under this Lease; provided said
purchaser expressly agrees in writing to be bound by the terms of the Lease.
14. DEFAULT; REMEDIES.
a. DEFAULT. The occurrence of any of the following shall constitute a
default and breach of this Lease by Tenant:
1. Any failure by Tenant to pay the rent or any other monetary
sums required to be paid hereunder after five (5) days have lapsed from
the date due;
2. The abandonment or vacation of the Leased Premises by
Tenant;
3. A failure by Tenant to observe and perform any other
provision of this Lease to be observed or performed by Tenant, where
such failure continues for thirty (30) days after written notice
thereof by Landlord to Tenant; provided, however, that if the nature of
such default is such that the same cannot reasonably be cured within
such thirty (30) day period, Tenant shall not be deemed to be in
default if Tenant shall within such period commence such cure and
thereafter diligently prosecute the same to completion;
4. The making by Tenant of any general assignment or general
arrangement for the benefit of creditors; the filing by or against
Tenant of a petition to have Tenant adjudged a bankrupt or of a
petition for reorganization or arrangement under any law relating to
bankruptcy; the appointment of a trustee or receiver to take possession
of substantially all of Tenant's assets located at the Leased Premises
or of Tenant's interest in this Lease; or the attachment, execution or
other judicial seizure of substantially all of Tenant's assets located
at the Leased Premises or of Tenant's interest in this Lease;
5. The occurrence of two (2) or more defaults hereunder
(regardless of whether cured) within any twelve (12) month period shall
be deemed an uncurable material default hereunder, and at Landlord's
option, entitle Landlord to any or all remedies allowed by law or
equity and/or as further stated herein.
b. REMEDIES. In the event of any default or breach by Tenant, Landlord
may at any time thereafter, with or without notice and demand and without
limiting Landlord in the exercise of any right or remedy at law or in equity
which Landlord may have by reason of such default or breach:
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1. Maintain this Lease in full force and effect and recover
the rent and other monetary charges as they become due, without
terminating Tenant's right to possession; irrespective of whether
Tenant shall have abandoned the Leased Premises. In the event Landlord
elects to not terminate the Lease, Landlord shall have the right to
attempt to re-let the Leased Premises at such rent and upon such
conditions and for such a term, and to do all acts necessary to
maintain or preserve the Leased Premises as Landlord deems reasonable
and necessary without being deemed to have elected to terminate the
Lease including removal of all persons and property from the Leased
Premises; such property may be removed and stored in a public warehouse
or elsewhere at the cost of and for the account of Tenant. In the event
any such re-letting occurs, this Lease shall terminate automatically
upon the new Tenant taking possession of the Leased Premises.
Notwithstanding that Landlord fails to elect to terminate the Lease
initially, Landlord at any time during the term of this Lease may elect
to terminate this Lease by virtue of such previous default of Tenant.
2. Terminate Tenant's right to possession by any lawful means,
in which case this Lease shall terminate and Tenant shall immediately
surrender possession of the Leased Premises to Landlord. In such event
Landlord shall be entitled to recover from Tenant all damages incurred
by Landlord by reason of Tenant's default including without limitation
thereto, the following: (i) the worth at the time of award of any
unpaid rent which had been earned at the time of such termination; plus
(ii) the worth at the time of award of the amount by which the unpaid
rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that is proved could have
been reasonably avoided; plus (iii) the worth at the time of award of
the amount by which the unpaid rent for the balance of the term after
the time of award exceeds the amount of such rental loss that is proved
could be reasonably avoided; plus (iv) any other amount necessary to
compensate Landlord for all the detriment proximately caused by
Tenant's failure to perform its obligations under this Lease or which
in the ordinary course of things would be likely to result therefrom;
plus (v) at Landlord's election, such other amounts in addition to or
in lieu of the foregoing as may be permitted from time to time by
applicable state law. Upon any such re-entry Landlord shall have the
right to make any reasonable repairs, alterations or modifications to
the Leased Premises, which Landlord, in its sole discretion, deems
reasonable and necessary. As used in subparagraph (i) above, the "worth
at the time of award" is computed by allowing interest at the rate of
ten (10%) percent per annum from the date of default. As used in
subparagraphs (ii) and (iii) the "worth at the time of award" is
computed by discounting such amount at the discount rate of the U.S.
Federal Reserve Bank at the time of award plus one (1%) percent. The
term "rent," as used in this Paragraph 14, shall be deemed to be and to
mean the rent to be paid pursuant to Paragraph 3 and all other monetary
sums required to be paid by Tenant pursuant to the terms of this Lease.
c. LATE CHARGES. Tenant hereby acknowledges that late payment by Tenant
to Landlord of rent and other sums due hereunder will cause Landlord to incur
costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges and late charges which may be
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imposed on Landlord by the terms of any mortgage or trust deed covering the
Leased Premises. Accordingly, if any installment of rent or any other sum due
from Tenant shall not be received by Landlord or Landlord's designee within ten
(10) days after such amount shall be due, Tenant shall pay to Landlord a late
charge equal to ten (10%) percent of such overdue amount. The parties hereby
agree that such late charge represents a fair and reasonable estimate of the
costs Landlord will incur by reason of late payment by Tenant. Acceptance of
such late charge by Landlord shall in no event constitute a waiver of Tenant's
default with respect to such overdue amount, nor prevent Landlord from
exercising any of the other rights and remedies granted hereunder.
d. DEFAULT BY LANDLORD. Landlord shall not be in default unless
Landlord fails to perform obligations required of Landlord within a reasonable
time, but in no event later than thirty (30) days after written notice by Tenant
to Landlord and to the holder of any first mortgage the Leased Premises whose
name and address shall have theretofore been furnished to Tenant in writing,
specifying wherein Landlord has failed to perform such obligation; provided,
however, that if the nature of Landlord's obligation is such that more than
thirty (30) days are required for performance, then Landlord shall not be in
default if Landlord commences performance within such thirty (30) day period and
thereafter diligently prosecutes the same to completion.
15. BROKER'S FEES.
Landlord and Tenant acknowledge that there are no broker fees due or
payable as a result of the execution of this Lease.
16. MISCELLANEOUS.
a. ESTOPPEL CERTIFICATE.
1. Tenant shall at any time upon not less than ten (10) days
prior to written notice from Landlord execute, acknowledge and deliver
to Landlord a statement in writing (i) certifying that this Lease is
unmodified and in full force and effect (or, if modified, stating the
nature of such modification and certifying that this Lease, as so
modified, is in full force and effect) and the date to which the rent
and other charges are paid in advance, if any, and (ii) acknowledging
that there are not, to Tenant's knowledge, any uncured defaults if any
are claimed. Any such statement may be conclusively relied upon by a
prospective purchaser or encumbrance of the Leased Premises.
2. Tenant's failure to deliver such statement within such time
shall be conclusive upon Tenant (i) that this Lease is in full force
and effect, without modification except as may be represented by
Landlord, (ii) that there are no uncured defaults in Landlord's
performance, and (iii) that not more than one month's rent has been
paid in advance.
3. If Landlord desires to finance or refinance the Leased
Premises, or any part thereof, Tenant hereby agrees to deliver to any
lender designated by Landlord such financial statements of Tenant as
may be reasonably required by such lender. All such financial
statements shall be received by Landlord in confidence and shall be
used only for the purposes set forth herein.
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b. TRANSFER OF LANDLORD'S INTEREST. In the event of a sale or
conveyance by Landlord of Landlord's interest in the Leased Premises other than
a transfer for security purposes only, Landlord shall be relieved from and after
the date specified in such notice of transfer of all obligations and liabilities
accruing thereafter on the part of the Landlord, provided that any funds in the
hands of Landlord at the time of transfer in which Tenant has an interest, shall
be delivered to the successor of Landlord. This Lease and all rights and
obligations hereunder shall not be affected by any such sale with the transferee
of Landlord's interest succeeding to all such rights and obligations of the
Landlord hereunder and Tenant agrees to attorn to the purchaser or assignee
provided all Landlord's obligations hereunder are assumed in writing by the
transferee.
c. CAPTIONS; ATTACHMENTS; DEFINED TERMS.
1. The captions of the paragraphs of this Lease are for
convenience only and shall not be deemed to be relevant in resolving
any question of interpretation or construction of any section of this
Lease.
2. Exhibits attached hereto, and any addenda or schedules
initialed by the parties, are deemed by attachment to constitute part
of this Lease and are incorporated herein.
3. The words "Landlord" and "Tenant," as used herein, shall
include the plural as well as the singular. Words used in neuter gender
include the masculine and feminine and words in the masculine or
feminine gender include the neuter. The term "Landlord" shall mean only
the owner or owners at the time in question of the fee title or a
tenant's interest in a ground lease of the Leased Premises. The
obligations contained in this Lease to be performed by Landlord shall
be binding on Landlord's successors and assigns only during their
respective periods of ownership.
d. ENTIRE AGREEMENT. This instrument along with any exhibits and
attachments hereto constitutes the entire agreement between Landlord and Tenant
relative to the Leased Premises and this Agreement and the exhibits and
attachments may be altered, amended or revoked only by an instrument in writing
signed by both Landlord and Tenant. Landlord and Tenant agree hereby that all
prior or contemporaneous oral agreements between and among themselves and their
agents or representatives relative to the leasing of the Leased Premises are
merged in or revoked by this Agreement.
e. SEVERABILITY. If any term or provision of this Lease shall, to any
extent, be determined by a court of competent jurisdiction to be invalid or
unenforceable, the remainder of this Lease shall not be affected thereby, and
each term and provision of this Lease shall be valid and be enforceable to the
fullest extent permitted by law.
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f. COSTS OF SUIT.
1. As a separate obligation and as additional rent due which
is due immediately hereunder, if Landlord shall take any action or
bring any action for any relief against the Tenant, declaratory or
otherwise, arising out of this Lease, or for the collection of any sums
due hereunder or after obtaining a Judgment against Tenant, including
but not limited to the preparation and filing of seven (7) day notices
for non-payment of rent, thirty (30) day notices to terminate tenancy,
eviction proceedings, collection proceedings, and appeal proceedings)
the Tenant shall pay the Landlord's actual reasonable attorneys' fees,
costs and expenses which shall be deemed to have accrued on the
commencement of such action and shall be paid whether or not such
action is prosecuted to judgment.
2. Should Landlord be made a party to any litigation
instituted by Tenant or by any third party against Tenant, or by or
against any person holding under or using the Leased Premises by
license of Tenant, or for the foreclosure of any lien for labor or
material furnished to or for Tenant or any such other person or
otherwise arising out of or resulting from any act or transaction of
Tenant or of any such other person, Tenant covenants to save and hold
Landlord harmless from any judgment rendered against Landlord or the
Leased Premises or any part thereof, and all costs and expenses,
including attorneys' fees, incurred by Landlord or in connection with
such litigation.
g. TIME; JOINT AND SEVERAL LIABILITY. Time is of the essence of this
Lease and each and every provision hereof, except as to the conditions relating
to the delivery of possession of the Leased Premises to Tenant. All rights and
remedies available to the parties shall be cumulative and non-exclusive of any
other remedy at law or in equity.
h. BINDING EFFECT; CHOICE OF LAW. The parties hereto agree that all the
provisions hereof are to be construed as both covenants and conditions as though
the words importing such covenants and conditions were used in each separate
paragraph hereof; subject to any provisions hereof restricting assignment or
subletting by Tenant, all of the provisions hereof shall bind and inure to the
benefit of the parties hereto and their respective heirs, legal representatives,
successors and assigns. This Lease shall be governed by the laws of the State of
Michigan.
i. WAIVER. No covenant, term or condition or the breach thereof shall
be deemed waived, except by written consent of the party against whom the waiver
is claimed, and any waiver or the breach of any covenant, the term or condition
shall not be deemed to be a waiver of any preceding or succeeding breach of the
same or any other covenant, term or condition. Acceptance by Landlord of any
performance by Tenant after the time the same shall have become due shall not
constitute a waiver by Landlord of the breach or default of any covenant, term
or condition unless otherwise expressly agreed to by Landlord in writing.
j. SURRENDER OF LEASED PREMISES. The voluntary or other surrender of
this Lease by Tenant, or a mutual cancellation thereof, shall not work a merger,
and shall, at the option of the Landlord, terminate all or any existing
subleases or subtenancies, or may, at the option of Landlord operate as an
assignment to it of any or all such subleases or subtenancies.
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k. HOLD OVER. If Tenant remains in possession of all or any part of the
Leases Premises after the expiration of the term hereof, with or without the
express or implied consent of Landlord, such tenancy shall be from month to
month only, subject to all the provisions of this Lease to the extent the same
can be applicable to a month-to-month tenancy, except that the Base Rent for
each month will be 150% of the regular monthly installments of Base Rent as well
as Additional Rent owing by Tenant for the last month of the Lease term.
l. SIGNS AND AUCTIONS. Tenant shall not place any sign upon the Leased
Premises or conduct any auction thereon without Landlord's prior written
consent.
m. REASONABLE CONSENT. Except as limited elsewhere in this Lease,
wherever in this Lease Landlord or Tenant is required to give its consent or
approval to any action on the part of the other, such consent or approval shall
not be unreasonably withheld. In the event of failure to give any such consent,
the other party shall be entitled to specific performance at law and shall have
such other remedies as are reserved to it under this Lease, but in no event
shall Landlord or Tenant be responsible in monetary damages for failure to give
consent unless said failure is withheld maliciously or in bad faith.
n. INTEREST ON PAST-DUE OBLIGATIONS. Except as expressly herein
provided, any amount due to Landlord not paid when due shall bear interest at
fifteen (15%) percent per annum from the due date. Payment of such interest
shall not excuse or cure any default by Tenant under this Lease.
o. RECORDING. Tenant shall not record this Lease without Landlord's
prior written consent, and such recordation shall, at the option of Landlord
constitute a non-curable default of Tenant hereunder. Either party shall, upon
request of the other, execute, acknowledge and deliver to the other a "short
form" memorandum of this Lease for recording purposes.
p. NOTICES. All notices or demands of any kind required or desired to
be given by Landlord or Tenant hereunder shall be in writing and shall be deemed
delivered four (4) business days after depositing the notice or demand in the
United States mail, certified or registered, postage prepaid, addressed to the
Landlord or Tenant respectively at the addresses set forth herein (or at such
other addresses as may be designated by such parties in a notice pursuant to
this Paragraph).
q. LIMITATION OF LANDLORD'S LIABILITY. Tenant hereby agrees that
Landlord's liability in connection with any default hereunder shall be limited
to the proceeds of sale received upon execution, following judgment, against the
Leased Premises and out of the rents or other income from such property
receivable by Landlord, or out of the consideration received by Landlord from
the sale or other disposition of the Leased Premises, and Landlord and its
agents, employees and any other persons holding interests under or through
Landlord shall not be liable for any deficiency.
r. LANDLORD'S ENTRY. Landlord or its agents shall have the right to
enter the Leased Premises at all reasonable times to examine it, to show it to
prospective lenders or purchasers, or to make improvements or additions as
Landlord may deem necessary or desirable. During the period beginning six (6)
months prior to the expiration of the term of this Lease, Landlord may place
upon the Leased Premises the usual notice "To Let" and may show such premises to
prospective lessees or other persons.
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17. SECURITY.
a. SECURITY INTEREST. To secure the performance of all covenants,
conditions and agreements of this Lease and subject and subordinate only to
those security interests which Tenant may grant in connection with the operation
of its business at the Leased Premises, Tenant hereby gives to Landlord a lien
and security interest, in all property, equipment, fixtures, chattels and
inventory (hereinafter called the "Collateral") which may at any time be placed
in or upon the Leased Premises and also upon the proceeds thereof. Upon an Event
of Default, Landlord may exercise any of its rights and remedies provided by the
Uniform Commercial Code, including obtaining immediate possession of the
Collateral, which may be sold at public or private sale after at least five (5)
days' notice to Tenant. The proceeds of any such sale, after payment of
Landlord's expenses, shall be applied to the payment of Tenant's obligations
hereunder and satisfaction of such a default. Enforcement of this lien and
security interest shall be in addition to and shall not waiver, alter or limit
or affect in any manner any other remedies available to Landlord. Tenant agrees
that upon Landlord's request it shall execute and deliver all such financing
statements as may be necessary or perfect this lien and security interest or
alternatively that Landlord may file this Lease as a financing statement in the
appropriate recording office.
18. LEASE RENEWAL OPTION. Provided that Tenant is not in default of any
of the terms, covenants and conditions hereof at the time of making such
election, Tenant shall have the right or option to elect to extend the original
term of this Lease for one (1) additional term of three (3) years. Such
extension or renewal of the original terms shall be on the same terms,
covenants, or conditions as provided for in the original lease, except that the
Base Rent shall be increased to the Fair Market Rental Value of the Leased
Premises ("FMV"). FMV shall be determined by a real estate appraiser licensed by
the State of Michigan, and mutually agreed upon by the parties. In the event the
parties are unable to agree upon an appraiser, each party shall select its own
appraiser, and the two appraisers shall agree upon a third to determine FMV.
Prior to the expiration of the original term, Tenant shall provide Landlord 180
day written notice of its election to excise this option, or the same shall be
deemed waived.
IN WITNESS WHEREOF, the Landlord and Tenant have executed this Lease as
of the date and year first above written.
LANDLORD: TENANT:
ALKAR STEEL CORPORATION
/s/ Xxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxx
----------------- --------------------
Xxxx Xxxxx, as Trustee
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EXHIBIT A
LEGAL DESCRIPTION OF LEASED PREMISES
Land in the City of Roseville, Macomb County, Michigan, described as: A parcel
of land of part of the southwest 1/4 of Xxxxxxx 0, Xxxx 0 Xxxxx, Xxxxx 00 Xxxx,
Xxxx of Roseville, Macomb County Michigan being more particularly described as
follows: Commencing at the west 1/4 corner of said Section 7 and proceeding
thence north 89 degrees 43 minutes 00 seconds east along the east and west 1/4
line a distance of 1383.83 feet to the centerline of Xxxxxxxx Avenue (66.00 feet
wide) and thence south 00 degrees 02 minutes 30 seconds east along said
centerline of Xxxxxxxx Avenue, a distance of 595.80 feet to the point of
beginning of property herein described; thence south 00 degrees 02 minutes 30
seconds east a distance of 200.00 feet; thence south 89 degrees 30 minutes 00
seconds west a distance of 555.37 feet; thence north 00 degrees 45 minutes 00
seconds west a distance of 200.00 feet; thence north 89 degrees 30 minutes 00
seconds east a distance of 557.84 feet to the point of beginning. Contains 2.556
acres of land more or less. Subject to the rights of the public over the
easterly 33.00 feet (Xxxxxxxx Avenue): also subject to any and all easements or
rights-of-way of record.
