EXHIBIT 10.52
LEASE AGREEMENT
The TAPEMARK Company ("Owner") and the WTC Industries, Inc. ("Tenant") referred
to below hereby agree to the terms and conditions of this Lease as hereinafter
set forth.
I. Basic Provisions
1.1 Date of Lease: 03/01/98
1.2 Tenant Name and Address: WTC Industries, Inc., 000 Xxxxx
Xxxxxx Xxxx, Xxxx Xx. Xxxx, XX 00000-0000
1.3 Premises: 0000 Xxxxxxxxx Xxxx, Xxxx Xx. Xxxx, XX
55118-Mezzanine
(the "Premises") situated on the real property legally
described in attached exhibit A (the Land).
1.4 Lease Term: 12 months, expiration date February 28, 1999.
1.5 Rent: WTC Industries, Inc., will lease approximately 5,000
square feet of manufacturing and office space at two TAPEMARK
facilities located in West St. Xxxx, Minnesota as follows:
DESCRIPTION LEASE SPACE LOCATION
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Manufacturing Space Approx. 3,200 sq. ft. 0000 Xxxxxxxxx Xxxx
Office Space Approx. 1,800 sq. ft. 000 Xxxx Xxxxx Xxxxxx
Lease Cost: Owner hereby leases to Tenant the 5,000 square
feet of manufacturing and office space @ $7.00/square foot per
year for a total lease value of $35,000.00. The Tenant will
pay Owner the lease cost of $35,000.00 in the manner
identified in Section 3. - Rent in this Lease Agreement.
1.6 Light manufacturing/assembly - 0000 Xxxxxxxxx Xxxx facility.
Office space - 000 Xxxx Xxxxx Xxxxxx facility.
1.7 Name and Use. Tenant shall do business on the Premises under
the name of: WTC Industries, Inc.
2. Grant. Owner hereby leases to Tenant, and Tenant hereby leases from
Owner, the Premises upon the terms and conditions set forth hereinafter. Taking
possession of the Premise by Tenant shall be conclusive evidence as against
Tenant that the Premises are in satisfactory conditions on such date of
possession.
3. Rent. Upon execution of this Lease, Tenant shall provide Owner with
an executable Stock Option Certificate for 112,00 shares at an exercise price
of$.3125 per share, "the bid price", with an expiration date of December 31,
2000. This Stock Option Certificate is considered payment in full during the
term of this lease for the manufacturing and office space identified in Section
1.5 above.
4. Use of Premises. Tenant shall use the Premises for the purpose
stated at all times in Section 1.6 of this Lease, and shall conduct its business
at all times in accordance with all applicable federal, state, and local laws,
regulations and ordinances. Tenant shall, at its expense, obtain and maintain
all necessary permits required for the conduct of Tenant's business on the
Premises. Tenant's use of the Premises shall be further subject to any rules and
regulations promulgated from time to time by Owner.
5. Hazardous Waste. Tenants shall not cause or introduce to the
property or allowed to be introduced to the property after the effective date of
this lease, as a result of any intentional or unintentional act of omission on
its part, a releasing, spilling, leaking, pumping, emitting, pouring, seeping,
leaching, emptying or dumping of "Toxic Materials." "Hazardous Substance" or
"Hazardous Waste" in, on or about the Premises or the Land (the above terms
shall have the meaning subscribed to such terms and state or federal statutes
and/or regulations promulgated in relation thereto and shall include petroleum,
asbestos and agricultural chemicals and pesticides.)
Tenant, and Tenant's respective successors and assigns, agree to
defend, indemnify and hold harmless Owner, its successors and assigns; and in
turn the Owner and its successors agree to defend, indemnify and hold harmless
the Tenant and the Tenant's respective successors and assigns, from and against
any and all claims, demands, judgments, damages, actions, causes of action,
injuries, administrative orders, consent agreements and orders, liabilities,
penalties, cost and expenses of any kind whatsoever, including claims arising
out of loss of life, injury to persons, property or business or damage to
natural resources arising out of the use or discharge of Toxic Material,
Hazardous Substance or Hazardous Waste by Tenant or parties in contractual
relationship with Tenant. Tenant acknowledges that its indemnification of Owner
and obligations hereunder shall not terminate upon the termination of this
Lease.
Tenant and Tenant's respective successors and assigns, shall bear, pay
and discharge when and as the same become due and payable, any and all such
judgments or claims for damages, penalties or otherwise against Owner described
above, shall hold Owner harmless for those judgments or claims, and proceedings
and negotiation of any description with any and all person, political
subdivisions or government agencies arising out of any of the occurrences set
fourth above, and in turn, the Owner shall do the same.
6. Maintenance; Repairs; Expenses. Tenant shall be responsible for all
routine maintenance and repair within their own leased space during the term of
this Lease. Owner shall be responsible for the maintenance and repair of all
structural
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components, foundation, and roof of the Premises. Owner shall also be
responsible for all plumbing and heating to be in working order at time of
possession. The exceptions being: Janitorial will be provided by tenant with
TAPEMARK responsible for trash removal. All mechanical, plumbing, and electrical
will be done at WTC expense, but first must meet TAPEMARK's approval relative to
the contractors, design and conformance to code. All mechanical plumbing and
electrical or other work performed in this section of the lease agreement must
be of a temporary nature and, if requested by the Owner, removed by the Tenant
at Tenant's expense prior to the termination of this lease.
7. Insurance. Tenant, at its sole cost and expense but for the mutual
benefit of Owner and Tenant, shall purchase and keep and maintain in force and
effect during the term of the lease, as follows:
a. comprehensive general public liability, products liability, contractual
liability, and property damage liability insurance, under policies and with
limits of not less than $2,000,000 for personal injury, bodily injury, sickness,
disease or death and $2,000,000 for damage or injury to or destruction of
property (including the loss of use thereof) for any one occurrence. Tenant's
policy or policies shall name Owner and its officers, agents and employees as
additional insured.
b. all risks" property insurance, such as a policy to cover Tenant's stock in
trade, fixtures, furniture, equipment, and tenant's improvements. Such policy
shall contain a replacement cot endorsement and a clause pursuant to which the
insurance carrier waives all rights of subrogation against the Landlord with
respect to losses payable under such policies.
x. xxxxx insurance; if required.
d. worker's compensation insurance, with coverage according to the requirements
of the appropriate worker's compensation statutes.
All of the foregoing insurance policies shall be written on forms and with
insurance companies satisfactory to the Owner, shall provide for at least thirty
(30) days' prior written notice to Owner of any cancellation or material
modification of such policies, shall be in amounts sufficient to prevent Owner
from becoming a co-insurer of any loss thereunder, and shall provide that loss
proceeds under any such policies be made payable to Owner.
8. Indemnification by Tenant. Tenant shall indemnify and hold Owner and
its agent and employees harmless from and against any and all claims, actions,
liability and expense in connection with loss of life, bodily injury and/or
damage occurring on the Premises occasioned by Tenant, its agents, employees,
servants, licenses or invites, unless the same be caused wholly or in part by
the willful or grossly negligent act or proceeding is brought against the
parties indemnified under this Section, Tenant, at its expense, upon receiving
notice thereof from Owner, agrees to defend such action or proceeding by
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counsel reasonably acceptable to Owner. Owner agrees to indemnify Tenant from
any act by any person injured outside the Premises not occupied by the Tenant.
9. Taxes and Assessments. Real estate taxes and special assessments for
the Premises due and payable during the Lease Term shall be paid by the Owner.
10. Utilities. Owner will be responsible for providing general
utilities (heating, lighting, air-conditioning, general electrical, water and
sewer) and will be provided at Owner's expense. Tenant is responsible for all
other utilities included, but not limited to, special electrical, water, gas,
phone lines and service, data communications, etc. Tenant must receive Owner's
permission to install any utilities or service as defined in this section of the
lease agreement. Tenant is solely responsible for the installation charges and
disconnect/removal charges upon termination of this lease agreement.
11. Alterations and Liens. Tenant may not make any alterations or
improvements to the Premises (except routine maintenance and repairs as provided
in Section 6) without the prior written consent of the Owner. Tenant shall not
allow any liens of any kind to attach to the Premises on the Land, including
mechanics' liens.
12. Subordination of Lease. This Lease shall be subordinate to the lien
of any present or future mortgage against the Premises and the Land. Upon
written request of Owner or the holder of any such mortgage, Tenant shall by
appropriate instructment subordinate its rights under this lease to the lien of
such mortgage. A refusal by Tenant to execute and deliver any such instrument
shall constitute an event of default under this lease.
13. Attornment. Tenant shall, in the event any proceedings are brought
for the foreclosure of any mortgage made by Owner covering the Land and the
Premises, attorn to the purchaser upon any such foreclosure and recognize such
purchaser as owner under this Lease. Upon the request of any interested party,
Tenant shall execute, acknowledge and deliver an appropriate instrument
evidencing the attornment provided for in this Section. A refusal by Tenant to
execute and deliver any such statement shall constitute an event of default
under this lease.
14. Damage to Premises. If the Premises are damaged or destroyed by
fire or other casualty insurable under standard "all risks" insurance so as to
become partially or totally untenantable, Owner may elect to terminate this
lease by giving notice therefore to Tenant within 30 days after such occurrence.
If Owner exercises such right, then this Lease shall cease as of the date of
such notice and all rent and other charges payable by Tenant shall be adjusted
as of the date of the damage. In the event of major damage to the Premises, and
the Premises are rendered untenable, the Tenant at their sole option may
terminate the Lease after a reasonable time after the event.
If Owner does not elect to terminate this Lease, then Owner shall
repair and restore the Premises with due diligence, and all rent and other
charges payable hereunder
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shall be abated during any period in which such damage materially interferes
with the operation of Tenant's business on the Premises.
Rent abatement shall be Tenant's sole right against Owner by reason of
such damage and such abatement shall apply only during the period commencing
with such damage and ending when Owner substantially completes its repairs.
15. Condemnation of Property. If any part of the Premises shall be
taken by eminent domain, then the Term of this Lease shall terminate as to the
portion of the Premises taken as of the date possession shall be adjusted as of
the date of such termination. In the event a partial taking is not so extensive
as to render the Premises unsuitable for the business of Tenant, this lease
shall continue in effect as to such portion. In the event of any taking of the
Premise, Tenant shall not be entitled to any part of the condemnation award,
whether paid as compensation for diminution in value to the leasehold or to
award. To the extent the amount recoverable by Owner is not diminished thereby,
Tenant shall have the right to claim and recover from the condemning authority
(but not from Owner) such compensation as may be separately awarded to Tenant in
Tenant's own name and right on account on any damage to Tenant's business by
reason of such taking.
16. Default and Remedies. If rent, or any other charge payable by
Tenant under this Lease shall be unpaid on the date payment is required, or if
Tenant fails to perform any of the other terms, conditions, covenants and
obligation of this Lease to be observed and performed by Tenant for more than
fifteen (15) days after Owner gives Tenant notice of such default (it being
agreed that a default other than the failure to pay money which is of such a
character that the cure thereof reasonably requires longer than 15 days shall be
deemed cured within said period if Tenant commences a cure within such 15 days
and completes the same with due diligence), or if Tenant shall vacate or abandon
the Premises (a failure, without Owner's written consent, to operate its
business in the Premises for 20 consecutive days or more being conclusively
deemed an abandonment), or suffer his Lease to be taken under any writ of
exclusion, attachment or other process of law, then Owner shall have the
following rights in addition to all its other rights or remedies:
(a) Owner may, upon notice to Tenant, terminate this Lease and reenter
the Premises and take possession of the Premises. No re-entry or taking
possession of the Premises by Owner shall be construed as an election on its
part to terminate this Lease unless a notice of such intention is given to
Tenant (all other demands and notices of forfeiture or other similar notices
being hereby expressly waived by Tenant). Upon the service of any such notice of
termination, the term of this Lease shall automatically terminate. Should Owner
at any time terminate this Lease for any breach, in addition to any other
remedies it may have, it may recover from Tenant all damages it may incur by
reason of such breach, including the cost of recovering the Premises, reasonable
attorneys fees, and the value at the time of such termination of any rent
reserved in this Lease for the remainder of the term over the ten reasonable
rental value of the Premises for the
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remainder of such term, all of which amount shall be immediately due and payable
from Tenant to Owner.
(b) Owner may make such alterations and repairs as it shall determine
may be reasonably necessary to relet the Premises and Owner may (but shall not
be required to) relet the same or any part thereof upon such terms and
conditions as Owner in its sole discretion may deem advisable. Upon any
reletting, all rentals received by Owner from such reletting shall be applied as
follows: first, to the payment of any indebtedness other than rent or other
charges due under this Lease from Tenant to Owner; second, to the payment of any
costs and expenses of such reletting, including brokerage fees, attorneys' fees,
and costs of such alterations and repairs; and third, to the payment of rent and
other charges due and unpaid hereunder. In no event shall Tenant be entitled to
receive any surplus of any sums received by Owner on a reletting in excess of
the rental and other charges payable hereunder. If such rentals and other
charges received from such reletting during any month are less than those to be
paid during that month by Tenant shall pay any such deficiency to Owner upon
demand.
17. Surrender of Property. On the last day of the Lease Term or on the
earlier termination thereof, Tenant shall peaceably surrender the Premises to
Owner in good condition, reasonable wear and tear excepted.
18. Holding Over. In the event Tenant remains in possession of the
Premises after the expiration of the Lease term, Tenant, at Owner's option,
without the execution of a new lease, shall be deemed to be occupying the
Premises as a tenant from month-to-month at the annual rent for the last year of
the Lease Term, subject to all other conditions of this Lease.
19. General Provisions.
(a) Entire Agreement. This Lease, and exhibits, constitute the complete
agreement between Owner and Tenant concerning the Premises. There are no oral
agreements, understandings, promises or representations between Owner and Tenant
affecting this Lease. Any prior negotiations and understandings between the
parties shall be of no force or effect and shall not be used to interpret this
Lease.
(b) Successors. All rights and liabilities herein given to or imposed
upon the respective parties hereto shall extend to and bind the respective
successors and assigns of the parties. No rights, however, shall injure to the
benefit of any assignee of Tenant unless the assignment to such assignee has
been made in accordance with the provisions of this Lease.
(c) Governing Law. The laws of Minnesota shall govern this Lease.
(d) Amendment. Except as otherwise expressly provided herein, no
alteration or addition to this Lease shall be biding upon the Owner or Tenant
unless reduced to writing and signed by them.
20. Notices and Payments. Whenever any payment, notice, consent,
approval, or authorization is required or permitted under this Lease, the same
shall be in writing and
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shall be sent by hand delivery or by registered or certified mail (return
receipt requested), postage prepaid, as follows:
To Owner:
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To Tenant:
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21. Assignment; Subletting. Tenant may not assign this Lease or sublet
the Premises only with the prior written consent of Owner.
22. Attorneys' Fees. In the event of a default in any of the terms of
this Lease, the defaulting party shall pay to the non-defaulting party on demand
all attorneys' fees and costs incurred in the enforcement of this Lease.
23. Additional Items.
23.1 Throughout the term of this lease agreement, Tenant will operate as an
independent business occupying a portion of the TAPEMARK Company facilities
located at 0000 Xxxxxxxxx Xxxx and 000 Xxxx Xxxxx Xxxxxx, Xxxx Xx. Xxxx, XX
00000. All costs associated with operating the WTC Industries, Inc. business at
these location will be billed directly to WTC Industries, Inc. In no event, will
any costs or charges associated with their business be billed directly to
TAPEMARK Company without the written consent of two senior officers of the
TAPEMARK Company.
23.2 Manufacturing Space - 0000 Xxxxxxxxx Xxxx Facility Mezzanine Area
a. Access to the building will be via Lothenbach lower entrance. Appropriate
security access cards will be issued. ($15 initiation fee per card and $15
replacement charge). A twenty-four hour notice is required. TAPEMARK will not be
responsible for access of temporary WTC employees (no card access and require
escorting by WTC personnel).
b. Working hours will coincide with the TAPEMARK hours unless appropriate
arrangements are made and approved.
c. Rest room and cafeteria privileges are granted for the lower level only.
d. No access is allowed to the TAPEMARK mezzanine office or any manufacturing
areas except for movement of goods to and from dock and personnel traffic to
work areas.
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e. Assistance in the movement of materials to and from production area will be
provided by TAPEMARK personnel. No TAPEMARK power equipment will be operated by
WTC personnel.
f. The shipping dock may be used. However, WTC will use their own documents and
postage.
g. Confidentially statements will be required relative to TAPEMARK business.
h. Tenant will abide by all TAPEMARK safety and health requirements.
23.3 Office Space - 150 East Xxxxx Avenue Lower Level Office Space
a. Access to the building will be via the front entrance or the back entrance.
TAPEMARK receptionist will greet visitors and call WTC receptionist for
notification. The WTC personnel are responsible for coming up to greet their
visitors and escorting them to their offices. WTC visitors are required to
follow the same security procedures as TAPEMARK visitors, but must sign in as
WTC visitors.
b. Working hours will coincide with the TAPEMARK hours for this location unless
appropriate arrangements are made and approved with authorized TAPEMARK
personnel.
c. WTC employees should use the rest rooms on the lower level - one rest room is
under the steps and additional rest rooms are next to the lunch room. The lunch
room facilities and equipment is reserved for the use of TAPEMARK personnel
between 12:00 Noon and 12:30 p.m.. We would recommend WTC personnel who would
like to use the lunch room facilities do so either before 12:00 Noon or after
12:30 p.m. Please leave facilities clean and orderly after each use.
d. WTC employees shall not have access to TAPEMARK facilities other than to the
premises which are specifically part of this Lease, unless escorted by
authorized TAPEMARK personnel. The primary reason for this restriction is to
protect the confidentiality of the information processed by the Corporate office
employees located in this facility. One exception to this restriction would be
for those WTC employees who have a need to visit the offices of Xxx Xxxx, Xx.
and Xxx Xxxx, Xx. as dictated by those individuals.
e. No TAPEMARK power equipment will be operated by WTC personnel.
f. The shipping dock may be used as follows: Incoming materials will be received
and distributed by the Warehouse personnel in Building 150. If inspection of
incoming goods are required by WTC, WTC should make personnel available to do so
when the goods are received. TAPEMARK personnel are only responsible for
receiving and moving the goods to the WTC offices. Items maybe shipped out via
the Warehouse docks, but the
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items must be packaged and prepared for shipping by WTC. TAPEMARK will not
provide shipping materials and goods may not be shipped out using TAPEMARK's
shippers and then be rebilled to WTC. WTC will use their own documents and
postage.
g. Confidentiality statements will be required relative to TAPEMARK business.
h. Tenant will abide by all TAPEMARK safety and health requirements.
i. Use of Small and Large Conference Rooms in this facility. WTC is requested to
conduct their internal meetings as well as meetings with visitors within their
leased office space if at all possible. Use of the TAPEMARK Conference Room
facilities is permissible if approved by authorized TAPEMARK personnel. In such
instances, approved WTC meetings are to be scheduled through Xxx Xxxxxxx with
TAPEMARK located in the front offices of Building 150. TAPEMARK will respect
WTC's meeting schedule for either conference room, but must retain the right to
preempt any WTC meeting if necessary.
The "Owner" and the "Tenant" hereby execute this Lease on February 9, 1998.
OWNER
By /s/ Xxxxx Xxxxxxxxxx
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Title Sr. Vice President & Chief Financial Officer
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TENANT
By /s/ Xxxx Xxxxxx
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Title Chief Financial Officer
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