COMMERCIAL PROPERTY LEASE AGREEMENT
This Lease Agreement is made and entered into at Logan, Utah effective the 1st
day of December, 1999, by and between PVC, Incorporated, a Utah corporation with
principal offices in Logan, Utah (hereinafter "Lessor"), and NACO INDUSTRIES,
INC., a Utah corporation with principal offices in Logan, Utah (hereinafter
"Lessee").
1. PROPERTY LEASED. Lessor, in consideration of the rents and
agreements to be paid and performed by Lessee, does lease to Lessee those
premises situated at 395 West 1400 North, in Logan, Cache County, State of Utah,
and further described on Exhibit "A" attached hereto and by this reference
incorporated herein.
2. TERM. This lease shall continue for the term of ten (10) years,
commencing on December 1, 1999 and continuing thereafter through November 30,
2009, or until earlier terminated as set forth herein. However, in the event
that Lessee shall notify Lessor in writing of its intention to renew this lease,
which notice must be given not less than ninety (90) days prior to the
expiration of the initial term hereof, then this lease shall be renewed under
the same terms as set forth herein, including the annual adjustments of the
rentals hereunder, for an additional period of sixty (60) months.
3. RENTAL. Rental payments shall become due and payable hereunder on a
monthly basis, payable in advance, commencing on the first day of December, 1999
and continuing on the first day of each month thereafter until November 1, 2004,
when the last of such monthly rental payments shall be paid. Rental payments
shall initially commence at the rate of $13,500.00 per month; and, upon each
annual anniversary date of this lease agreement, the monthly rentals shall be
adjusted by the amount of any increase in the Consumer Price Index over the
immediately preceding year. Rentals shall be payable to the Lessor at its
office, or to such person or at such other place as the Lessor may from time to
time designate in writing.
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4. USE OF PREMISES. The premises shall be used for the purpose of
operating the Lessee's business of manufacturing and marketing pvc pipe fittings
and related products, and for no other purposes without the prior consent of
Lessor. Lessee shall not commit or permit to be committed any waste upon the
premises. Lessee shall not use the premises, or any part thereof, for any
purpose other than the purpose or purposes for which said premises are leased,
and no use in any event shall be made of the premises, nor acts done, which will
increase the hazard of damage to the premises, or injury to those in or about
the premises, or the existing rate of insurance upon the building, nor shall
Lessee sell, keep or use in or about said premises any article which may limit
the coverage afforded by the Utah Standard Form fire insurance policy, or the
sale, presence, or use of which is prohibited by law.
Lessee shall keep said premises open for business during usual business
hours and failure to do so for more than thirty (30) days, other than for repair
or remodeling, may be deemed a breach of lease by Lessee at Lessor's election.
Lessee shall, at Lessee's sole cost and expense, without obligation to Lessor,
observe in the use of the premises all municipal, county, state and federal
regulations, ordinances and statutes now in force, or which may hereafter be in
force, and failure to do so shall be a material breach of this agreement.
5. POSSESSION. The date of possession of said leased premises by
Lessee pursuant to this lease shall be the lst day of December, 1999.
6. INSURANCE. Lessee shall maintain fire and casualty insurance on the
real and personal property subject to this lease and shall hold Lessor harmless
from any loss in connection therewith. Lessee further agrees to take out and
keep in force during the life hereof, at Lessee's expense, public liability
insurance to protect against any liability to the public, incident to the use of
or resulting from any occurrence in or about said premises. The liability under
such insurance shall be not less than $500,000.00 combined single limit or the
equivalent on bodily injury and property damage.
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7. REPAIR AND MAINTENANCE. The repair, maintenance and upkeep of the
leased premises shall be as follows: Lessor shall be responsible for: Structural
components in the buildings, except as may be required to maintain or repair the
same as the result of the use or damage thereof by Lessee or others in the
conduct of Lessee's business. Lessee shall be responsible for: All other
maintenance.
8. ALTERATIONS. Lessee shall not make or permit to be made any
additions or alterations of the premises or any part thereof without the written
consent of Lessor, and any additions to or alterations of said premises, when
permitted to be made, except movable furniture, trade fixtures, and drapery
installed by Lessee, shall become at once a part of the realty and belong to
Lessor and shall not be removed by Lessee at the end of his occupancy, or
otherwise, except upon written consent or order of Lessor. Any linoleum, rubber
tile or other floor covering affixed to the floors shall become at once a part
of the realty and belong to Lessor and shall not be removed by Lessee at the end
of his occupancy, or otherwise, except upon written consent or order of Lessor.
9. MECHANIC'S LIENS. It is expressly agreed that if any work that is
performed by Lessee or Lessee's agents, employees or representatives, either
prior to or subsequent to the possession by Lessee of the above-described
premises, shall give rise to any lien against the leased premises, Lessee shall
indemnify Lessor against and save Lessor harmless from any and all mechanic's
liens or claims of liens and all attorney fees, costs and expenses which may
accrue, grow out of, or be incurred by reason of said work performed by Lessee
or Lessee's agents, employees or representatives.
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10. UTILITIES. Lessee shall pay for all gas, heat, light, power, water,
rubbish removal, telephone service, and all other services supplied to said
premises.
11. INSPECTION AND ENTRY BY OWNER. Lessee shall permit Lessor and
Lessor's agents to enter into and upon the premises at all reasonable times for
the purpose of inspecting the same, or for the purpose of making reasonable
repairs, alterations or additions to any portion of said premises which Lessor
may see fit to make, including installation of pipes, conduits, etc. to service
adjacent property, without any reduction or rebate of rent to Lessee for loss of
occupancy or quiet enjoyment of the premises thereby occasioned, and Lessee
shall permit Lessor at any time after sixty (60) days prior to expiration of the
leasehold term to place upon the premises "for rent," "for lease," or other
signs.
12. BANKRUPTCY OR INSOLVENCY. Should the Lessee become bankrupt or
insolvent, either voluntarily or involuntarily, or a receiver be appointed to
take charge of Lessee's assets, or general assignment be made for the benefit of
creditors, the same shall constitute a breach of the terms of this lease and the
Lessor may declare the lease terminated, and the Lessee shall have no right,
title or interest in the property, and the Lessor may keep as damages any
advanced rental.
13. DEFAULT. Lessee shall pay rent to Lessor at such place as may be
assigned from time to time by Lessor, at the time provided as aforesaid, without
deduction or delay. In the event of failure of Lessee so to do, or in the event
of a breach of any other condition or agreement by Lessee, it shall be lawful
for Lessor, after giving to Lessee a fifteen (15) day written notice of default,
and after failure by Lessee within said fifteen (15) days to remedy or cure said
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default, and after the lapse of said fifteen (15) days, to re-enter and take
possession of the said premises and to remove all persons and property therefrom
and to repossess said premises. Any such re-entry or repossession or any notice
served in connection therewith shall not operate to release Lessee from any
obligations for rental or otherwise under this lease, and shall be in addition
to any available remedies and time set forth for notices given pursuant to the
Utah unlawful detainer statutes.
If Lessee shall be in default in performance of any condition or
agreement, or shall abandon or vacate the premises, Lessor shall have the right,
after giving the required written notice of default, and after failure by Lessee
to timely remedy or cure said default, to relet the said premises, or any
portion thereof, for such rent and upon such terms as Lessor may see fit. Lessee
shall pay the expenses of such reletting, including any and all real estate
broker's commissions.
All remedies herein given Lessor shall be cumulative and in addition to
other legal and equitable rights which Lessor may have, and if Lessor institutes
legal action to collect the total or balance of the rent hereby reserved, the
filing of such action prior to the expiration of the full leasehold term shall
not be deemed premature as a matter of law irrespective of whether Lessor has
retaken possession and relet the premises for his own account or for the account
of Lessee.
14. ATTORNEY FEES. Should either party employ an attorney in connection
with the violation of the terms of this lease, or for the preparation and
serving of notice or other matters, and whether suit is filed or not, the party
so employing an attorney and the prevailing party shall be entitled to
reasonable costs and attorney fees in addition to all other amounts as provided
for in this lease.
15. ASSIGNMENT AND SUBLEASE. Lessee shall not assign this lease, or any
interest therein, and shall not lease or sublet the premises, or any part
thereof, or any right of privilege appurtenant thereof, or mortgage or
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hypothecate the leasehold, without the prior written consent of Lessor, which
consent shall not be unreasonably withheld. A consent to one assignment,
subletting or hypothecation shall not be construed as a consent to any
subsequent assignment, subletting or hypothecation. Unless such written consent
has been had and obtained, any assignment or transfer of this lease, or of any
interest therein, or any subletting or hypothecation, either by voluntary or
involuntary act of Lessee or by operation of law, or otherwise, may be deemed a
breach of lease by Lessee at Lessor's election and any such purported
assignment, transfer, subletting or hypothecation without such consent may be
deemed by Lessor to be null and void. Lessor's consent to any such assignment,
transfer, subletting or hypothecation shall relieve Lessee from any obligation
under this lease.
16. DESTRUCTION OF PREMISES. In the event of a partial destruction of
the said premises during the said term, from any cause, Lessor shall forthwith
repair the same, provided such repair can be made within ninety (90) days under
the laws and regulations of state, federal, county or municipal authorities, but
such partial destruction shall in no way annul or void this lease, except that
Lessee shall be entitled to a proportionate deduction of rent while such repairs
are being made unless the Lessee was the cause of the destruction. Such
proportionate deduction of rent to be based upon the extent to which the making
of such repairs shall interfere with the business carried on by Lessee in the
said premises, but in no event shall it be more than the monthly rental. If such
repairs cannot be made in ninety (90) days, Lessor may, at his option, make same
within a reasonable time, this lease continuing in full force and effect and the
rent to be proportionately rebated as aforesaid in this paragraph. In the event
that Lessor does not so elect to make such repairs which cannot be made under
such laws and regulations, this lease may be terminated at the option of either
party. In the event that the building is destroyed in which the demised premises
may be situated to the extent of not less than 33 1/3 percent of the replacement
costs thereof, Lessor may elect to terminate this lease, whether the demised
premises be injured or not. A total destruction of the building in which the
said premises may be situated shall terminate this lease.
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17. CONDEMNATION. If the whole or any part of the premises shall be
taken by any public authority under the power of eminent domain, then the terms
of this lease shall cease as to the part so taken from the day possession of
that part shall be required for any public purpose, and rent shall be paid up to
that day, and on or before that day Lessee shall elect, in writing, either to
cancel this lease or to continue in possession of the remainder of the premises
under the terms herein provided, except that rent shall be reduced in proportion
to the amount of the premises taken. All damages awarded for such taking shall
belong to and be the property of Lessor, whether such damages be awarded as
compensation for diminution in value to the leasehold or to the fee of the
premises. Lessee hereby irrevocably assigns to Lessor any right to compensation
or damages to which Lessee may become entitled by reason of the condemnation of
all or a part of the demised premises.
18. DAMAGE LIABILITY. Lessee assumes all risks of injury or damage to
all persons and property, excluding injuries or damage caused by pre-existing
structural defects or Lessor's negligent conduct, including, but not limited to,
all property of Lessee and Lessor in or about the premises, and Lessee shall
hold Lessor harmless for any such damage or injury; except that Lessee shall not
be liable to Lessor for damage or injury to Lessor's property caused by
earthquakes, other acts of God, or Lessor's negligent conduct.
It is further understood and agreed that the provision herein in
connection with the Lessor being insured against liability shall in no way be
construed as creating liability upon its part or admission of liability upon its
part, but is merely for the protection of Lessor.
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19. OUTSIDE STORAGE. There shall be no storage of any kind of material
on the outside of the building herein described, except as incident to the
normal operation of Lessee's business, and except as may be expressly permitted
or allowed by permission of Lessor.
20. TERMINATION. On the last day of the term, or sooner termination,
the Lessee shall peaceably and quietly leave and yield the premises to Lessor,
with fixtures and appurtenances in good condition and repair, reasonable wear
and tear excepted. Lessee shall leave the premises and appurtenances free and
clear of rubbish and clean; and in the event Lessee fails to do so, Lessor may
charge Lessee for the reasonable cost incurred by Lessor in having the same
done.
21. WAIVER. Waiver by Lessor of any breach of any condition or
agreement of this lease by Lessee shall not be deemed to be a waiver of any
subsequent breach of the same or any other condition or agreement by Lessee.
22. SUCCESSOR. The condition and agreements herein contained shall
apply to and bind the heirs, personal representatives, and successors in
interest of the parties hereto.
23. TAXES.
(a) Payment of Taxes. Lessee shall pay all real property taxes
applicable to the premises during the term of this lease.
(b) Definition of Real Property Tax. As used herein, the term "real
property tax" shall include any form of assessment, levy, penalty, or tax (other
than inheritance or estate 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, as against any legal or equitable interest of Lessor in the premises or
on the real property of which the premises are a part, or as against Lessor's
right to rent or other income.
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(c) Personal Property Taxes. Lessee shall pay prior to delinquency
all taxes assessed against and levied upon trade fixtures, furnishings,
equipment and all other personal property of Lessee, and all personal property
leased to Lessee hereunder, whether such property is contained in the premises
or elsewhere. When possible, Lessee shall cause said trade fixtures,
furnishings, equipment and all other personal property to be assessed and billed
separately from the real property of Lessor.
24. HOLDING OVER. Holding over after the expiration of the term or any
extension thereof with the consent of Lessor shall be a tenancy from month to
month at a minimum monthly rental of the then prevailing rent.
25. SERVING OF NOTICE. All notices as provided for in this lease or by
law shall be in writing and shall be served either personally or by mail, and
shall be made upon the parties at the following address unless a party serves
written notice upon the other party of a change of address:
Lessor: PVC, Inc.
000 Xxxx 0000 Xxxxx
Xxxxx, Xxxx 00000
Lessee: NACO INDUSTRIES, Inc.
000 Xxxx 0000 Xxxxx
Xxxxx, Xxxx 00000
26. TOTAL AGREEMENT. It is understood and agreed between Lessor and
Lessee that this written lease agreement is the total agreement between Lessor
and Lessee with respect to the lease of the property described herein, and that
there are no other agreements, oral or otherwise, between them affecting the
same.
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IN WITNESS WHEREOF, the parties hereto have executed this document by
officers duly authorized to do so, effective as of the date and year first set
forth above.
LESSOR: LESSEE:
By/s/PVC, Inc. By:/s/Naco Industries, Inc.
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Title:PVC, Inc. Title:NACO INDUSTRIES, Inc.
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EXHIBIT "A"
Legal Description
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