LEASE AGREEMENT
by and between
X. X. XXXXX
and
ATS REMANUFACTURING, INC.
INDEX
1. Description of Premises; Purpose. . . . . . . . . . . . . . . . . . . . 1
2. Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3. Acceptance of Premises. . . . . . . . . . . . . . . . . . . . . . . . . 2
4. Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
5. Alterations and Improvements by Lessee. . . . . . . . . . . . . . . . . 3
6. Use of Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
7. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
8. Fire and Extended Coverage Insurance. . . . . . . . . . . . . . . . . . 4
9. Lessee's Covenant to Repair and Replace . . . . . . . . . . . . . . . . 4
10. Lessor's Covenant to Repair and Replace . . . . . . . . . . . . . . . . 5
11. Trade Fixtures and Equipment, Non-Liability for Certain Damages . . . . 5
12. Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
13. Damage or Destruction of Premises . . . . . . . . . . . . . . . . . . . 6
14. Mutual Waiver of Subrogation. . . . . . . . . . . . . . . . . . . . . . 6
15. Signs and Advertising . . . . . . . . . . . . . . . . . . . . . . . . . 6
16. Indemnification, Liability Insurance, and Hazardous Substances. . . . . 7
17. Lessor's Right of Entry . . . . . . . . . . . . . . . . . . . . . . . . 10
18. Eminent Domain. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
19. Events of Default and Remedies. . . . . . . . . . . . . . . . . . . . . 11
20. Defaults by Lessor. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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21. Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
22. Assigning and Subletting. . . . . . . . . . . . . . . . . . . . . . . . 13
23. Transfer of Lessor's Interest . . . . . . . . . . . . . . . . . . . . . 14
24. Covenant of Quiet Enjoyment . . . . . . . . . . . . . . . . . . . . . . 14
25. Estoppel Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 14
26. Protection Against Liens. . . . . . . . . . . . . . . . . . . . . . . . 14
27. Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
28. Nonwaiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
29. Landlord Liability. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
30. Holding Over. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
31. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
32. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
33. GM Parts Shortage Facility. . . . . . . . . . . . . . . . . . . . . . . 17
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LEASE AGREEMENT
THIS LEASE AGREEMENT (the "Lease") made and entered into as of the 31st day
of July, 1997, by and between
X.X. XXXXX
000 Xxxxx Xxxx Xxxxxx
No. 2400 Ashley Arms
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
hereinafter called "Lessor"; and
ATS REMANUFACTURING, INC.,
a Delaware corporation
000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
hereinafter called "Lessee";
W I T N E S S E T H :
In consideration of the mutual covenants and agreements contained herein,
the parties agree for themselves, their successors, and assigns, as follows:
1. DESCRIPTION OF PREMISES; PURPOSE. Lessor hereby leases to Lessee, and
Lessee hereby accepts and rents from Lessor the property of Lessor located at
0000 XXXXX XXXX, Xxxxxxxx, Xxxxxx Xxxxxx, Xxxxx Xxxxxxxx (the "Property");
together with the exclusive right to use all buildings, parking areas,
driveways, sidewalks, walkways, and other improvements and facilities located on
and at the Property (collectively with the Property, the "Premises").
2. TERM.
(a) INITIAL TERM. The term of this Lease (the "Initial Term") shall
commence as of August 1, 1997 (the "Lease Effective Date"), and unless
sooner terminated in accordance with this Lease, shall end at midnight on
July 31, 2002 (the "Lease Termination Date"). As used in this Lease, the
term "Lease Year" shall mean each year, or portion thereof, of the Term
commencing on the Lease Effective Date and thereafter on each successive
anniversary of the Lease Effective Date, and ending at the expiration of
twelve (12) months thereafter (or portion
thereof if the remaining term of the Lease is less than twelve (12)
months) until the Lease Termination Date.
(b) RENEWAL TERM. At the expiration of the Initial Term of this
Lease, provided that Lessee is not in default hereunder, Lessee shall have
the right and option to renew this Lease for one (1) additional five (5)
year renewal term (the "Renewal Term"). Such Renewal Term shall commence
as of the end of the Initial Term of this Lease. During such Renewal Term,
the rights and obligations of Lessor and Lessee shall be those set forth in
this Lease except that Lessor shall have no obligation to make any
improvements in the Premises. If Lessee shall desire to exercise its right
and option with respect to the Renewal Term, it shall give Lessor notice of
the intent to renew in writing not less than six (6) months prior to the
expiration of the Initial Term of this Lease. If Lessee shall fail to give
such notice to Lessor within the time period, it shall be conclusively
deemed that Lessee has elected not to renew and extend the Term of this
Lease. During the Renewal Term, in addition to Base Rental, Lessee shall
continue to pay Taxes and Insurance Premiums described in Subsection 4(b)
of this Lease and as adjusted during the Renewal Term.
3. ACCEPTANCE OF PREMISES. Lessee shall have the right to make
improvements to the Premises in compliance with the "Description of Work" in
EXHIBIT B attached hereto, with such minor variations as Lessee may deem
advisable without the consent of Lessor. Lessee shall make no other
improvements or modifications to the Premises except with the prior written
consent of Lessor. All work done by Lessee shall be in full compliance with all
applicable laws, rules, codes and regulations, and Lessee shall pay when due all
sums due and owing with respect to this work. Lessee hereby indemnifies and
holds Lessor harmless from all loss, claim, liability or expense incurred in any
way, directly or indirectly, in connection with all work done by Lessee, or at
the request of Lessee, or for the benefit of Lessee, in and to the Premise
including, without limitation, reasonable attorneys fees.
4. RENTAL. Commencing on Lease Effective Date and continuing through the
full Term of this Lease, Lessee shall pay to Lessor at the address shown in
Section 31, or such other place as designated in writing by Lessor a rental
consisting of the sum total of the Base Rental as described in Subsection 4(a)
and shall in addition pay the Taxes and Insurance Premiums as described in
Subsection 4(b).
(a) BASE RENTAL. Monthly base rental (the "Base Rental") during the
Initial Term and the Renewal Term, if applicable, of this Lease shall be
$35,000.00. It is understood and agreed that the Base Rental shall
commence on the Lease Effective Date (the "Rent Commencement Date").
2
Each payment of Base Rental, without notice, demand, reduction, setoff
or any defense, shall be made in advance on or before the first (1st) day
of each month. If the Rent Commencement Date is a date other than the
first day of a calendar month, the Base Rental shall be prorated daily from
such date to the first day of the next calendar month and paid on the Rent
Commencement Date, and Base Rental for any other partial month during the
Term shall be paid in advance at that daily rate equal to the monthly Base
Rental divided by the number of days in the month for which such Base
Rental is due.
(b) PAYMENT OF TAXES AND INSURANCE PREMIUMS. Commencing on the Lease
Effective Date and thereafter, Lessee shall pay, without limitation, all ad
valorem taxes assessed against the Property, and insurance premiums for
fire and extended coverage and liability insurance policies for the
Property (collectively, "Taxes and Insurance Premiums") within thirty (30)
days after receipt of the bills for same or sooner if necessary to avoid a
delinquency. Lessor and Lessee shall prorate the 1997 ad valorem tax as of
the Lease Effective Date.
(c) DATE DUE: LATE CHARGE. All Base Rental hereunder are due on the
first (1st) business day of each successive month and shall be past due on
the fifth (5th) business day of each successive month. If Lessee should
fail to pay to Lessor when due any installment of rental or other sum to be
paid hereunder, Lessee shall pay Lessor on demand a late charge of five
percent (5%) thereof. Failure to pay such late charge upon demand therefor
shall be an event of default hereunder. Provision for such late charge
shall be in addition to all other rights and remedies available to Lessor
hereunder or at law or in equity and shall not be construed as liquidated
damages or limiting Lessor's remedies in any manner; further provided that
such late charge shall automatically accrue notwithstanding whether Lessor
shall have given Lessee written notice of any such delay in payment.
5. ALTERATIONS AND IMPROVEMENTS BY LESSEE. No structural changes or
other material alterations, additions, or improvements may be made to the
Premises by Lessee without the prior written consent of Lessor, which consent
shall be as to the plans and specifications for such changes and as to the
contractor or subcontractor engaged to accomplish such changes; provided,
however, Lessor's consent to changes or material alterations or improvements to
the Premises, the plans and specifications for such changes and the contractor
or subcontractor of Lessee for such change shall not be unreasonably withheld.
All alterations, additions or improvements, including without limitation, all
walls, carpeting, floor and wall coverings and other permanent real estate
fixtures (excluding, however, Lessee's trade fixtures as described in paragraph
12 below) made by, for, or at the direction of Lessee, upon the expiration or
earlier termination of this Lease shall become the property of Lessor and shall
remain upon the Premises, unless
3
Lessor shall require Lessee to remove same at the sole expense of Lessee at the
end of the Initial Term or Renewal Term.
6. USE OF PREMISES. Lessee shall use the Premises only for the Lessee
Operations (as later defined) and for no other purpose and shall comply with all
laws, ordinances, orders, regulations or zoning classifications of any lawful
governmental authority, agency or other public or private regulatory authority
(including insurance underwriters or rating bureaus) having jurisdiction over
the Premises. Lessee shall save Lessor harmless from any penalties, fines,
costs, expenses or damages resulting from failure to so comply. As used herein,
the term "Lessee Operations" shall mean the conduct of a manufacturing,
machining, warehousing and distribution operation and office and related
facilities. Lessee shall not do any act or follow any practice relating to the
Premises which shall constitute a nuisance or detract in any way from the
reputation of the Premises.
7. TAXES. Lessee shall pay any taxes or assessments of any nature
imposed or assessed upon its trade fixtures, equipment, machinery, inventory,
merchandise or other personal property located on the Premises and owned by or
in the custody of Lessee as promptly as all such taxes or assessments may become
due and payable without any delinquency. Lessee shall be responsible for the
payment of all ad valorem property taxes which are now or hereafter assessed
upon the Premises, as Section 4.
8. FIRE AND EXTENDED COVERAGE INSURANCE. Subject to the provisions of
Section 4, Lessor shall maintain and pay for a policy or policies of fire,
property insurance, and extended coverage, insuring the Premises in such amounts
and types as Lessor may deem advisable. If Lessee uses the Premises for any
purpose or in any manner which causes an increase in Lessor's insurance rates,
Lessee shall pay all additional premiums attributable to this use within thirty
(30) days after demand from Lessor in addition to all other payments due under
this Lease. Lessee shall maintain and pay for all fire and extended coverage
insurance on the contents of the Premises, including trade fixtures, equipment,
machinery, merchandise or other personal property belonging to or in the custody
of Lessee.
9. LESSEE'S COVENANT TO REPAIR AND REPLACE. Lessee shall be responsible
for all maintenance, repairs or replacements to the Premises of $5,000.00 or
less during the first lease year and for all maintenance, repairs or
replacements to the Premises after the first lease year, including, but not
limited to, the heating and air conditioning systems, roof, exterior walls,
structural members, including foundation and subflooring of the Premises, office
fronts, plate glass windows, doors, door closure devices, window and door
frames, mailing, locks and hardware and painting or other treatment of interior
and exterior walls.
4
Lessee's repairs and replacement shall be made promptly within a reasonable
time after written notice from Lessor of the need for repairs. At the end of
the term of this Lease, Lessee shall return the Premises to Lessor in as good
condition as on the Occupancy Date, excepting normal wear and tear and acts of
God.
10. LESSOR'S COVENANT TO REPAIR AND REPLACE. During the first year of
this Lease, Lessor shall be responsible for all maintenance, repairs or
replacements to the Premises in excess of $5,000.00, including, but not limited
to, the heating and air conditioning systems, roof, exterior walls, structural
members, including foundation and subflooring of the Premises, office fronts,
plate glass windows, doors, door closure devices, window and door frames,
mailing, locks and hardware and painting or other treatment of interior and
exterior walls.
Lessor's repairs and replacement shall be made promptly within a reasonable
time after written notice from Lessee of the need for repairs. At the end of
the first year of this Lease, Lessee shall be responsible for repair and
replacement pursuant to Paragraph 9 herein.
11. TRADE FIXTURES AND EQUIPMENT, NON-LIABILITY FOR CERTAIN DAMAGES.
(a) So long as Lessee is not in default under this Lease, any trade
fixtures and equipment installed in the Premises at Lessee's expense shall
remain Lessee's personal property and Lessee shall have the right at any
time during the term to remove such fixtures and equipment. Upon removal
of any fixtures or equipment, Lessee shall immediately restore the Premises
to substantially the same condition as they were when received by Lessee,
ordinary wear and tear and acts of God alone excepted. Any trade fixtures
and equipment not removed by Lessee at the expiration or an earlier
termination of the Lease shall at Lessor's option, either: (i) become the
property of Lessor or (ii) be removed by Lessor at Lessee's expense.
(b) Lessor and Lessor's agents and employees shall not be liable to
Lessee for any injury to person or damage to property caused by defect in
or failure of equipment, pipes or wiring, or broken glass, or by the
backing up of drains, or by gas, water, steam, electricity or oil leaking,
escaping or flowing into the Premises; nor shall Lessor be liable to Lessee
for any loss or damage that may be occasioned by or through the acts or
omissions of other lessees of Lessor's adjacent property or of any other
persons or entities whomsoever, excepting only duly authorized employees
and agents of Lessor. Lessor shall not be liable to Lessee for any
compensation, damages or reduction of rent by reason of inconvenience,
annoyance or loss of business arising from power losses or shortages, or
from the necessity of Lessor's entering the Premises for any of the
purposes authorized in this Lease (assuming that such entries are planned
by Lessor so as
5
to minimize any interference with the conduct of Lessee's business),
including repair of the Premises.
12. UTILITIES. Lessee shall pay for all utilities or services related to
its use of the Premises including electricity, gas, telephone and janitorial
services.
Lessor shall not be responsible for the stoppage or interruption of
utilities services.
13. DAMAGE OR DESTRUCTION OF PREMISES. If the Premises are damaged by
fire or other casualty, but are not rendered untenantable for Lessee's business,
either in whole or in part, Lessor shall cause such damage to be repaired
without unreasonable delay and the Annual Rent shall not be abated. If by any
reason of such casualty, the Premises are rendered untenantable for Lessee's
business, either in whole or in part, Lessor shall cause the damage to be
repaired or replaced without unreasonable delay, and in the interim, the Annual
Rental shall be equitably reduced as to such portion of the Premises as is
rendered untenantable. Any such abatement of rent shall not, however, create an
extension of the Term of this Lease. Provided, however, if by reason of such
casualty, the Premises are rendered substantially untenantable, and Lessor is
unable to give reasonable assurances that the amount of time required to repair
the damage shall not exceed one hundred eighty (180) days, then either party
shall have the right to terminate this Lease by giving written notice of
termination within sixty (60) days after the date of casualty. Notwithstanding
anything to the contrary contained in this paragraph, in the event of a casualty
loss to the Premises equal to 50% or more of the replacement value for the
Premises during the last Lease Year of the Term or the Renewal Term, either
party may, at its option, terminate this Lease by giving written notice within
60 days after the date of the casualty and rent shall xxxxx as of the date of
such notice. Except as provided herein, there shall be no obligation of Lessor
to rebuild or repair in case of fire or other casualty, and no termination
pursuant to this paragraph shall affect any rights of Lessor or Lessee hereunder
arising from prior defaults of the other party. Lessee shall give Lessor
immediate notice of any fire or other casualty in the Premises.
14. MUTUAL WAIVER OF SUBROGATION. For the purpose of waiver of
subrogation, the parties mutually release and waive unto the other, all rights
to claim damages, costs or expense for any injury to persons (including death)
or property caused by a casualty of any type whatsoever in, on or about the
Premises if the amount of such damage, cost or expenses has been paid to such
damaged party under the terms of any policy of insurance. All insurance
policies carried with respect to this Lease, if permitted under applicable law,
shall contain a provision whereby the insurer waives prior to loss all rights of
subrogation against either Lessor or Lessee.
15. SIGNS AND ADVERTISING. No sign shall be placed upon the Premises or
the Property by Lessee other than signage described on EXHIBIT C attached
hereto.
6
16. INDEMNIFICATION, LIABILITY INSURANCE, AND HAZARDOUS SUBSTANCES.
(a) INDEMNIFICATION BY LESSEE. Lessee shall indemnify and save
Lessor harmless against any and all claims, suits, demands, actions, fines,
damages, and liabilities, and all cost and expenses thereof (including
without limitation reasonable attorneys' fees) arising out of injury to
persons (including death) or property occurring in, on or about, or arising
out of, the Premises if caused by or occasioned wholly or in part by any
willful or negligent act or omission of Lessee, its agents, subtenants,
licensees, invitees, contractors, or employees (respectively, an "Event of
Tenant Misconduct"). Lessee shall also pay all costs, expenses and
reasonable attorneys' fees which may be incurred by Lessor in enforcing the
agreements of this Lease, whether incurred as a result of litigation or
otherwise. Lessee shall give Lessor immediate written notice of any such
occurrence causing material injury to persons or property.
(b) INDEMNIFICATION BY LESSOR. Lessor shall indemnify and save
Lessee harmless against any and all claims, suits, demands, actions, fines,
damages, and liabilities, including the cost and expenses thereof
(including reasonable attorneys' fees) arising out of injury to persons
(including death) or property occurring in, on or about, or arising out of,
the Premises if such damage or injury is caused by any willful or negligent
act or omission of Lessor, its agents or employees. Lessor shall pay all
costs, expenses and reasonable attorney's fees that may be incurred by
Lessee in enforcing the agreements of this Lease, whether incurred as a
result of litigation or otherwise.
(c) INSURANCE. At all times during the term of this Lease, Lessee
shall at its own expense keep in force public liability insurance in such
amounts and with such companies as shall from time to time be acceptable to
Lessor (and to any Lender having a mortgage interest in the Premises) and
naming as insured both Lessor and Lessee. The amounts of such coverage,
until changed at Lessor's reasonable request, shall be $3,000,000.00 with
respect to bodily injury or death of one person as a result of any one
accident and in amounts sufficient to cover the replacement value with
respect to damage to property. In addition thereto, Lessee shall provide
for "umbrella coverage" in the amount of $10,000,000.00. Lessee shall
first furnish to Lessor copies of policies or certificates of insurance
evidencing the required coverage and naming the Lessor as additional
insured under said policies, prior to the Occupancy Date and thereafter at
least ten (10) days prior to each policy renewal date. All policies
required of Lessee hereunder shall contain a provision whereby the insurer
is not allowed to cancel or materially change the coverage without first
giving 30 days written notice to Lessor.
7
(d) PRESENCE AND USE OF HAZARDOUS SUBSTANCES. Lessee shall not,
without Lessor's prior written consent, keep on or around the Premises for
use, disposal, treatment, generation, storage or sale, any substances
designated as, or containing components designated as hazardous, dangerous,
toxic or harmful (collectively referred to as "Hazardous Substances"),
and/or any substance that is subject to regulation by any then current
federal, state or local law, statute or ordinance and the rules and
regulations implementing them, including, but not limited to, the Resource
Conservation and Recovery Act (42 U.S.C. Section 6901 ET SEQ.); the
Comprehensive Environmental Response, Compensation and Liability Act (42
U.S.C. Section 9601 ET SEQ.); the Clean Water Act (33 U.S.C. Section 1251
ET SEQ.); the Clean Air Act (42 U.S.C. Section 7401 ET SEQ.); and the
Toxic Substances Control Act (15 U.S.C. Section 2601 ET SEQ.). Lessor is
hereby deemed to have consented to Lessee keeping on or around the Premises
those Hazardous Substances kept on or around the Premises by Automatic
Transmission Shops, Inc. during the lease that is being terminated on the
date hereof. With respect to any such Hazardous Substance, Lessee shall:
(1) Comply promptly, timely and in all material respects with
all governmental requirements for reporting, keeping and submitting
manifests, and obtaining and keeping current identification numbers;
(A) Submit to Lessor true and correct copies of all
reports, manifests and identification numbers at the same time as they
are required to be and/or are submitted to the appropriate
governmental authorities;
(2) Within ten (10) days of Lessor's request, submit written
reports to Lessor regarding Lessee's use, storage, treatment,
transportation, generation, disposal or sale of Hazardous Substances
and provide evidence satisfactory to Lessor of Lessee's compliance
with the applicable government regulations:
(3) Allow Lessor or Lessor's agent or representative to come on
the Premises at all reasonable times and after reasonable notice to
check Lessee's compliance with all applicable governmental regulation
regarding Hazardous Substances;
(4) Comply with minimum levels, standards or other performance
standards or requirements which may be set forth or established for
certain Hazardous Substances (if minimum standards or levels are
applicable to Hazardous Substances present on the Premises, such
levels or standards
8
shall be established by an on-site inspection by the appropriate
governmental authorities and shall be set forth in an addendum to the
Lease);
(5) Comply with all applicable governmental rules, regulations
and requirements regarding the proper and lawful use, sale,
transportation, generation, treatment and disposal of Hazardous
Substances; and
(6) Pay to Lessor upon demand as additional rent any and all
costs reasonably incurred by Lessor and associated with Lessor's
inspection of Lessee's Premises pursuant to this subparagraph and
Lessor's monitoring of Lessee's compliance with this subparagraph,
including Lessor's reasonable attorneys' fees and costs, payment of
which expenses shall only be due if incurred by Lessor after Lessor's
having reasonable belief that Lessee is not in compliance with this
subparagraph and Lessor's having communicated notice of noncompliance
to Lessee with Lessee having failed to comply, or commence compliance,
within ten (10) days of receipt of such notice from Lessor.
(e) UNAUTHORIZED RELEASES; CLEANUP COSTS; DEFAULT AND INDEMNIFICATION
SUBJECT TO PARAGRAPH (f).
(1) Lessee shall give immediate written notice to Lessor of any
release, spill, discharge or threatened discharge of any Hazardous
Substance at the Premises or surrounding environment, which release
was not made pursuant to or in conformance with the terms of any
permit or license issued to Lessee by the appropriate governmental
authority. This notice shall include a description of measures taken
or proposed to be taken by Lessee to contain and/or remedy the release
and any resultant damage to property, persons, the Premises and/or the
environment. Lessee shall also give immediate written notice to
Lessor of any private or governmental investigation relating to
Hazardous Materials on or about the Premises.
(2) At Lessee's own expense, Lessee shall promptly take all
steps necessary to contain and remedy any release of Hazardous
Substances to or in the Premises or surrounding environment, and all
resultant damage or injury to property, persons, and the environment.
Lessor shall have the right, but not the obligation, to participate in
and approve any environmental assessment or remedial cleanup plan for
the Premises. Lessee, its employees, agents and contractors shall
fully cooperate with any and all federal, state and local governmental
officials having jurisdiction over the Premises in resolving any
situation referring to the presence of Hazardous Substances on or
about the Premises.
9
(3) Lessee shall be fully and completely liable to Lessor for
any and all cleanup costs, and any and all other charges, fees,
penalties (civil and criminal) imposed by any governmental authority
with respect to Lessee's use, generation, handling, storage,
containment, disposal, transportation, and/or sale of Hazardous
Substances.
(f) Lessee shall indemnify, defend and save Lessor harmless from any
and all of the costs, fees, penalties and charges assessed against or
imposed upon Lessor (as well as Lessor's attorneys' fees and costs) as a
result of Lessee's use, generation, handling, storage, containment,
disposal, transportation, and/or sale of Hazardous Substances. With regard
to this subparagraph (e), Lessee's obligations hereunder shall survive the
expiration or earlier termination of this Lease.
(1) Upon Lessee's default under subparagraphs (d) or (e), and in
addition to the rights and remedies set forth elsewhere in this Lease,
Lessor shall be entitled to the following rights and remedies.
(i) At Lessor's option, to terminate this Lease immediately;
and
(ii) To recover any and all damages associated with the
default, including, but not limited to, cleanup costs and
charges, civil and criminal penalties and fees, loss of business
by Lessor, and any and all damages and claims asserted by third
parties and Lessor's attorneys' fees and costs.
(g) LIMITATIONS. Notwithstanding subparagraph (f), Lessee shall have
not liability to Lessor with respect to any Environmental Liabilities (as
defined in the Asset Purchase Agreement of even date herewith among Lessor,
Automatic Transmission Shops, Inc., Lessee and Aftermarket Technology
Corp.) unless and to the extent that Environmental Liabilities constitute
Buyer Environmental Liabilities (as defined in such Asset Purchase
Agreement).
17. LESSOR'S RIGHT OF ENTRY.
(a) Lessor, and those persons authorized by Lessor shall have the
right to enter the Premises at all reasonable times and upon reasonable
notice for the purposes of making inspections or showing the same to
prospective purchaser and/or lenders.
10
Further, during the last six (6) months of the Initial Term or of the
Renewal Term, Lessor and those persons authorized by it shall have the right at
reasonable times and upon reasonable notice to show the Premises to prospective
lessee.
18. EMINENT DOMAIN.
(a) If the whole of the Premises, or portion of the Premises as shall
substantially interfere with Lessee's use and occupancy of the Premises, is
taken under the power of eminent domain (including any conveyance made in
lieu thereof) then either party shall have the right to terminate this
Lease by giving written notice of such termination within 30 days after
notice of such taking. If neither party elects to terminate this Lease,
Lessor shall repair and restore the Premises to the best possible
tenantable condition and the Annual Rental shall be equitably reduced. All
compensation awarded for any taking or the proceeds of a private sale in
lieu thereof shall be the property of Lessor, whether such award is for
compensation for damages to the Lessor's or Lessee's interest in the
Premises, and Lessee hereby assigns all of its interest in any such award
to Lessor; provided, however, Lessor shall not have interest in any
separate award made to Lessee for loss of business, moving expense or the
taking of Lessee's trade fixtures or equipment if a separate award for such
items are made to Lessee.
(b) In the event a substantial portion, as reasonably determined by
Lessor, of the Premises is so taken by eminent domain, Lessor may, by
written notice to Lessee, terminate this Lease within thirty (30) days
after notice of such taking.
(c) In the event of a taking of the Premises which does not
substantially interfere with Lessee's use and occupancy of the Premises, or
in the event other portions of the Premises are taken and Lessor elects not
to terminate this Lease, Lessor shall promptly proceed to restore the
Premises (if affected) to substantially their condition prior to such
taking, and Rent shall be abated proportionately to that portion of the
Premises which is subject to such taking.
19. EVENTS OF DEFAULT AND REMEDIES.
(a) Upon the occurrence of any one or more of the following events
(the "Events of Default"), Lessor shall have the right to exercise any
rights or remedies available in this Lease, at law or in equity. Events of
Default shall be:
(i) Lessee's failure to pay when due any rental or other sum of
money payable hereunder within fifteen (15) days after such payment
becomes due;
11
(ii) Failure by Lessee to perform any other of the terms,
covenants or conditions contained in this Lease if not remedied within
thirty (30) days after written notice thereof;
(iii) Lessee becomes bankrupt or insolvent, or files any debtor
proceedings, or files pursuant to any statute a petition in bankruptcy
or insolvency or for reorganization, or files a petition for the
appointment of a receiver or trustee for all or substantially all of
Lessee's assets, and such petition or appointment is not set aside
within sixty (60) days from the date of such petition or appointment,
or Lessee makes an assignment for the benefit of creditors; or
(iv) Lessee vacates, abandons, or fails to operate in the
Premises or any substantial part thereof for thirty (30) or more
consecutive days or allows its leasehold estate to be taken under any
writ of execution and such writ is not vacated or set aside within
thirty (30) days.
(b) In addition to its other remedies, Lessor, upon an Event of
Default by Lessee, shall have the immediate right to reenter the Premises
provided such reentry can be accomplished without a breach of the peace.
If Lessor reenters the Premises, it may either terminate this Lease or from
time to time without terminating the Lease make such alterations and
repairs as may be necessary or appropriate to relet the Premises, and relet
the Premises upon such terms and conditions as Lessor deems advisable under
general market conditions. No retaking of possession of the Premises by
Lessor shall be deemed as an election to terminate this Lease; however, the
entering into of a new lease by Lessor for the Premises shall be deemed a
termination of the Lease. Lessee shall, however, remain liable for rentals
due up to the time of such termination, all shortages in rentals due after
the time of such termination and shall also be responsible for costs and
expenses including, but not limited to, reasonable attorneys' fees,
incurred by Lessor in connection with the retaking of the Premises. Formal
notice of termination of the Lease may also be given at any time by Lessor
to Lessee in writing following an Event of Default by Lessee.
20. DEFAULTS BY LESSOR. In the event Lessor shall at any time be in
default under the observance or performance of any covenant or agreement
required to be performed or observed by Lessor hereunder and such default shall
continue for a period of thirty (30) days after written notice to Lessor from
Lessee specifying the violation (or if such default is not capable of being
cured in a reasonable manner within thirty (30) days, then if lessor has failed
to commence to cure the same within said thirty (30) day period and thereafter
diligently prosecuted the same to completion), then Lessee shall have the right
to cure Lessor's breach default and/or perform such obligations on Lessor's
behalf
12
and recover from Lessor all reasonable costs and expenses incurred in connection
with such cure; or, alternatively, Lessee shall be entitled to all remedies
otherwise available in law or equity under the laws of the United States of the
State or North Carolina. In no event, however, shall Tenant be entitled to
terminate this Lease by reason of Lessor's default, except as otherwise provided
herein, except pursuant to a judgment of a court of competent jurisdiction
providing for such termination.
21. SUBORDINATION. This Lease is subject and subordinate to any and all
mortgages or deeds of trust now or hereafter placed upon the property of which
the Premises are a part, and this clause shall be self-operative without any
further instrument necessary to effect such subordination; however if requested
by Lessor, Lessee shall promptly execute and deliver to Lessor any such
certificate or certificates as Lessor may reasonably request evidencing
subordination of this Lease to the assignment of this Lease as additional
security for such mortgages or deeds of trust, including, without limitation a
subordination agreement; provided, however, in each case, the holder of the
mortgage or deed of trust (a "Mortgagee") shall agree that Lessee's rights to
quiet enjoyment and possession under this Lease shall not be divested by
foreclosure or other default proceedings thereunder so long as Lessee shall not
be in default under the terms of this Lease. Lessee shall continue its
obligations under this Lease in full force and effect notwithstanding any such
foreclosure or default proceedings by a Mortgagee. Lessee will, upon request by
Lessor, execute and deliver to Lessor or to any other person designated by
Lessor, any instrument or instruments required to give effect to the provisions
of this paragraph.
22. ASSIGNING AND SUBLETTING. Lessee shall not assign, sublet, mortgage,
pledge or encumber this Lease, the Premises, or any interest in the whole or in
any portion thereof, without the prior written consent of Lessor, the
determination as to which the judgment of Lessor shall be conclusive. If Lessee
makes any such assignment, mortgage, sublease or pledge with Lessor's written
consent, Lessee will still remain primarily liable for the performance and
observation of all of the terms of this Lease required to be observed or
performed by the Lessee hereunder. Lessor shall have the option, in its sole
discretion, to terminate this Lease effective as of the proposed effective date
of the assignment or subletting, by giving Lessee written notice thereof within
thirty (30) days after Lessor's receipt of said notice from Lessee (in the event
Lessee shall propose to sublet only a portion of the Premises, Lessor shall have
the additional option to terminate this Lease as to that portion of the Premises
proposed to be sublet). Should Lessor not elect to so terminate this lease in
connection with any proposed subletting or assignment, Lessor shall continue to
have the right to disapprove same. Upon any subletting or assignment by Lessee
without Lessor's written consent, any renewal options, expansion options, and/or
rights of first refusal granted herein shall become null and void. Consent by
Lessor to one or more assignments or sublettings shall not operate as a waiver
of Lessor's rights as to any subsequent assignments or sublettings. Lessor
understands that
13
on or after the date hereof Lessee is granting or will grant to The Chase
Manhattan Bank and certain other banks a security interest in, among other
things, all of Lessee's Documents, Equipment, General Intangibles, Instruments
and Inventory (as each of those terms is defined in the Uniform Commercial Code)
as collateral for Lessee's guarantee of the obligations of Aftermarket
Technology Corp. under that certain Revolving Credit Agreement dated as of
February 14, 1997 among such banks and Aftermarket Technology Corp. (as the same
may be amended or replaced from time to time) and Lessor hereby consents to the
granting of such security interest to the extent that it constitutes a security
interest in this Lease, the Premises or any interest in the whole or in any
portion thereof.
23. TRANSFER OF LESSOR'S INTEREST. Provided Lessor is not in default
hereunder, if Lessor shall sell, assign or transfer all or any part of its
interest in the Premises or in this Lease to a successor in interest which
expressly assumes the obligations of Lessor hereunder, then Lessor shall
thereupon be released or discharged from all covenants and obligations hereunder
and Lessee shall look solely to Lessor's successor in interest for performance
of all of Lessor's obligations. Lessee's obligations under this Lease shall in
no manner be affected by Lessor's assignment hereunder, and Lessee shall
thereafter attorn and look solely to such successor in interest as the Lessor
hereunder.
24. COVENANT OF QUIET ENJOYMENT. Lessor represents that it has full right
and authority to lease the Premises and Lessee shall peacefully and quietly hold
and enjoy the Premises for the full term hereof so long as it does not default
in the performance of any of the terms hereof.
25. ESTOPPEL CERTIFICATES. Within fifteen (15) days after a request by
Lessor, Lessee shall deliver a written estoppel certificate, in form supplied by
or acceptable to Lessor, certifying any facts that are then true with respect to
this Lease, including without limitation that this Lease is in full force and
effect, that no default exists on the part of Lessor or Lessee, that Lessee is
in possession, that Lessee has commenced the payment of rent, and that there are
no defenses or offsets claimed by Lessee with respect to payment of rentals
under this Lease.
26. PROTECTION AGAINST LIENS. Subject to paragraph 22, Lessee shall do
all things necessary to prevent the filing of any mechanics', materialmen's or
other types of liens whatsoever, against all or any part of the Premises by
reason of any claims made by, against, through or under Lessee. If any such
lien is filed against the Premises, Lessee shall either cause the same to be
discharged of record within thirty (30) days after filing or, if Lessee, in its
discretion and in good faith, determines that such lien should be contested, it
shall furnish such security as may be necessary to prevent any foreclosure
proceedings against the Premises during the pendency of such contest. If Lessee
shall fail to discharge such lien within said time period or fail to furnish
such security, then, Lessor may at its election, in addition to any other right
or remedy available to it,
14
discharge the lien by paying the amount claimed to be due or by procuring the
discharge by giving security or in such other manner as may be allowed by law.
If Lessor acts to discharge or secure the lien then Lessee shall immediately
reimburse Lessor for all sums paid and all costs and expenses (including
reasonable attorneys' fees) incurred by Lessor involving such lien together with
interest on the total expenses and costs at the maximum lawful rate.
27. FORCE MAJEURE. In the event Lessor or Lessee shall be delayed,
hindered or prevented from the performance of any act required hereunder, by
reason of governmental restrictions, scarcity of labor or materials, strikes,
fire, or any other reasons beyond its control, the performance of such act shall
be excused for the period of delay, and the period for performance of any such
act shall be extended as necessary to complete performance after the delay
period.
28. NONWAIVER. No course of dealing between Lessor and Lessee, or any
delay or omission of Lessor in exercising any right arising from the Lessee's
default, shall impair such right or be construed to be a waiver of a default.
29. LANDLORD LIABILITY. All obligations of Lessor hereunder will be
construed as covenants, not conditions, and all such obligations will be binding
upon Lessor only during the period of its ownership and possession of the
Premises and not thereafter. The term "Lessor" shall mean only the owner, for
the time being of the Premises and the Property, and in the event of the
transfer by such owner of its interest in the Premises or the Property, such
owner shall thereupon be released and discharged from all covenants and
obligations of the Lessor thereafter accruing, but such covenants and
obligations shall be binding during the lease term upon each new owner for the
duration of such owner's ownership. In the event of any breach or default by
Lessor in any term or provision of this Lease, Lessee agrees to look solely to
the equity or interest then owned by Lessor in the land and improvements which
constitute the Premises or the Property; however, in no event, shall any
deficiency judgment or any money judgment of any kind be sought or obtained
against any Lessor which is now or hereafter a party to this Lease.
30. HOLDING OVER. If Lessee remains in possession of the Premises or any
part thereof after the expiration of the term of this Lease without Lessor's
acquiescence, Lessee shall be deemed only a tenant at will and there shall be no
renewal of this Lease without a written agreement signed by both parties
specifying such renewal; in addition, the Base Rental required to be paid under
this Lease shall automatically become the amount of one hundred fifty percent
(150%) of the Base Rental payable with respect to the last calendar month of the
term of this Lease.
15
31. NOTICES. Any notice allowed or required by this Lease shall be deemed
to have been sufficiently served if the same shall be in writing and placed in
the United States Mail, via certified mail or registered mail, return receipt
requested, with proper postage prepaid and addressed as follows:
AS TO LESSOR: X. X. Xxxxx
000 Xxxxx Xxxx Xxxxxx
No. 0000 Xxxxxx Xxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
AS TO LESSEE: ATS Manufacturing, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attention: Chief Financial Officer
The addresses of Lessor and Lessee and the party, if any, to whose
attention a notice or copy of same shall be directed may be changed or added
from time to time by either party giving notice to the other in the prescribed
manner.
32. MISCELLANEOUS.
(a) BROKERAGE. Each party warrants to the other that no person or
entity is entitled to or has a claim for commission or related fee arising
out of this Lease. Accordingly, Lessor shall and does hereby indemnify and
hold Lessee harmless from and against any claim for commission which may be
payable in connection with this Lease and asserted by any party arising out
of any act or agreement by Lessor. Lessee shall and does hereby indemnify
and hold harmless Lessor from and against any claim for any commission
which may be payable in connection with this Lease and asserted by any
party arising out of any act or agreement by Lessee.
(b) EVIDENCE OF AUTHORITY. If requested by Lessor, Lessee shall
furnish appropriate legal documentation evidencing the valid existence and
good standing of Lessee and the authority of any parties signing this Lease
to act for Lessee.
(c) NATURE AND EXTENT OF AGREEMENT. This Lease, together with all
exhibits hereto and the Asset Purchase Agreement referred to in paragraph
16(f), contains the complete agreement of the parties concerning the
subject matter, and there are no oral or written understandings,
representations, or agreements pertaining thereto which have not been
incorporated herein. This Lease creates only the relationship of lessor
and tenant between the parties, and nothing herein shall impose upon either
party any powers, obligations or restrictions not
16
expressed herein. This Lease shall be construed and governed by the laws
of the state of North Carolina.
(d) BINDING EFFECT. This Lease shall be binding upon and shall inure
to the benefit of the parties hereto and their respective heirs, successors
and assigns. This Lease shall not be binding on Lessor until executed by
Lessor and delivered to Lessee. No amendment or modification of this Lease
shall be binding upon Lessor unless same is in writing and executed by
Lessor.
(e) CAPTIONS AND HEADINGS. The captions and headings in this Lease
are for convenience and reference only, and they shall in no way be held to
explain, modify, or construe the meaning of the terms of this Lease.
(f) LEASE REVIEW. The submission of this Lease to Lessee for review
does not constitute a reservation for or option for the Premises, and this
Lease shall become effective as a contract only upon execution and delivery
by Lessor and Lessee.
(g) MEMORANDUM OF LEASE. Upon the request of either party, the other
party shall join in the execution of a Memorandum of this Lease in
recordable form. Either party may record the Memorandum in the appropriate
public registry, at its own expense. Neither party shall record the Lease
itself without the written consent of the other party.
33. GM PARTS SHORTAGE FACILITY. Lessor currently rents (the "GM Lease")
on a month-to-month basis from Lessor property known as the GM Parts Storage
Facility, 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxxx Xxxxxxxx (the "GM Space")
for the storage of parts. As a material consideration hereunder, Lessee shall,
at the time it makes the Base Rental payments to Lessor, provide to Lessor the
number of square feet used by GM to store parts (the "Square Foot Number") in
the GM Space for the month proceeding the month that a particular Base Rental
payment is due. Lessor and Lessee acknowledge that the Square Foot Number is
used in calculating the rent owed by GM to Lessor under the GM Lease.
17
IN WITNESS WHEREOF, the parties have caused this Lease to be duly executed
and sealed pursuant to authority duly given as of the day and year first above
written.
LESSOR:
/s/ X. X. Xxxxx (SEAL)
-------------------------------------------
X. X. Xxxxx
LESSEE:
ATS REMANUFACTURING, INC.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Executive Officer
ATTEST:
/s/ Xxxxxx Xxxxxxxxxxxx
------------------------------
Xxxxxx Xxxxxxxxxxxx, Secretary
(CORPORATE SEAL)
18
STATE OF NORTH CAROLINA
COUNTY OF XXXXXX
Before me, the undersigned Notary Public in and for the County and State
aforesaid, personally came X. X. XXXXX and acknowledged the due execution of the
foregoing instrument in writing for the purposes therein expressed.
WITNESS my hand and notarial seal, this 31st day of July, 1997.
/s/ Xxxxxx X. Xxxxx
-------------------------------------------
Notary Public
My Commission Expires:
00
XXXXX XX XXXXX XXXXXXXX
XXXXXX XX XXXXXX
This 31st day of July, 1997, before me, the undersigned Notary Public in
and for the County and State aforesaid, personally came Xxxxxxx X. Xxxxxxx, who,
being duly sworn, says that he is Chief Executive Officer of ATS
REMANUFACTURING, INC., and that the seal affixed to the foregoing instrument in
writing is the corporate seal of said corporation, and that he signed and sealed
said instrument on behalf of said corporation by its authority duly given. And
the said Xxxxxxx X. Xxxxxxx acknowledged said instrument to be the act and deed
of said corporation.
WITNESS my hand and seal this 31st day of July, 1997.
/s/ Xxxxxx X. Xxxxx
-------------------------------------------
Notary Public
My Commission Expires:
20
GUARANTY OF LEASE
LESSOR: X. X. XXXXX SHOPPING CENTER:
0000 XXXXX XX.
LESSEE: ATS REMANUFACTURING, INC. LEASE DATED: JULY 31, 1997
FOR VALUE RECEIVED, and in consideration of and as an inducement for the
execution and delivery of the Lease referred to above between Lessor and Lessee,
the undersigned Guarantor hereby guarantees to Lessor, the full and prompt
payment of all Rent, and any and all other sums and charges payable by Lessee
under the Lease, and the full and timely performance and observance of all the
covenants, terms, conditions and agreements in the Lease to be performed and
observed by the Lessee. Guarantor hereby covenants and agrees that if default
shall at any time be made by the Lessee in the payment of any such Rent or of
the covenants, terms, conditions or agreements in the Lease, the Guarantor will
promptly pay such Rent and other sums and charges to the Lessor, and/or perform
and fulfill all of such terms, covenants, conditions and agreements, and will
pay the Lessor all damages and expenses, including attorneys' fees, that may
arise in consequence of any default by the Lessee under the Lease of by the
enforcement of this Guaranty.
This Guaranty in any absolute and unconditional guaranty of payment and of
performance. It shall be enforceable against the Guarantor, without the
necessity of any suit or proceedings on the Lessor's part of any kind or nature
whatsoever against the Lessee and without the necessity of any notice of non-
payment, non-performance, non-observance, acceptance of this Guaranty, or any
other notice or demand to which the Guarantor hereby expressly waives. The
Guarantor hereby expressly agrees that the validity of this Guaranty and the
obligations of the Guarantor hereunder shall in no way be terminated, affected,
diminished or impaired by reason of the assertion or failure to assert by the
Lessor against the Lessee any of the rights and remedies available to the Lessor
or by relief of Lessee from any of the Lessee's obligations under this Lease by
the rejection of the Lease in connection with proceedings under the Bankruptcy
laws now or hereafter in effect or otherwise.
This Guaranty shall be a continuing guaranty and the liability of the
Guarantor hereunder shall in no way be affected, modified or diminished by
reason of any assignment, renewal, modification or extension of the Lease or by
reason of any modification or waiver of or change in any of the terms,
covenants, conditions or provisions of the Lease, or by reason on any extensions
of time that may be granted by the Lessor to the Lessee or by reason of a change
for different use of the Demised Premises or by reason of any dealings or
transactions or matters or things occurring
between Lessor and the Lessee, whether or not the Guarantor has knowledge or
notice thereof. Lessor reserves the right to obtain credit report.
The assignment by Lessor of the Lease and/or the Rents and other receipts
thereof made either with or without the Guarantor's knowledge or notice shall in
no manner whatsoever release the Guarantor from any liability as Guarantor.
This Guaranty may be assigned by Lessor.
All the Lessor's rights and remedies under the said Lease or under this
Guaranty are intended to be distinct, separate and cumulative and no such right
and remedy therein or herein mentioned is intended to be an exclusion or a
waiver of any of the others. This Guaranty shall be binding upon the Lessor and
Lessee and their respective successors and assigns.
IN WITNESS WHEREOF, the undersigned has executed this Guaranty of Lease as
of the day and year set forth below.
GUARANTOR:
AFTERMARKET TECHNOLOGY CORP,
a Delaware Corporation
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
____________President
ATTEST:
/s/ Xxxxxx Xxxxxxxxxxxx
-----------------------------------
___________ Secretary
(Corporate Seal)
2
