LEASE AGREEMENT THIS AGREEMENT is made as of this 14th day of February, 2006, BY AND BETWEEN
THIS
AGREEMENT is made as of this 14th
day of
February, 2006, BY AND
BETWEEN
XXXXXX
X. XXXX and
XXXXXX
X. XXXXXX, hereinafter
collectively referred to as “Lessor,”
AND
AXION
BATTERY PRODUCTS, INC.,
a
Pennsylvania corporation hereinafter referred to as “Lessee.”
WITNESSETH:
WHEREAS,
Lessor is the owner of certain property located in the Township of Neshannock,
Xxxxxxxx County, Pennsylvania, as more fully described on Exhibit A hereto
(the
"Property"); and
WHEREAS,
Lessor desires to lease to Lessee, and Lessee desires to lease from Lessor,
a
portion of the Property; and
WHEREAS,
Lessor currently leases approximately 11,000 square feet of the Property to
Commercial Battery Company Of Pennsylvania ("CBC")
for use
as warehouse, office, and retail sales space pursuant to a lease (the "CBC
Lease") that expires September
30th
of
2006;
THEREFORE,
in consideration of the covenants and premises hereby mutually undertaken to
be
kept and performed by the parties hereto, the parties agree as follows with
the
intent to be legally bound:
1. Lessor
hereby leases to Lessee, and Lessee hereby rents and takes from Lessor that
portion of the Property consisting of approximately 62,732 square feet in the
aggregate (including 42,500 square feet of manufacturing space, 7,232 square
feet of office locker, lab and lunch area, 8,000 square feet of storage
buildings, and 5,000 square feet of basement area), which portion of the
Property is further described in Exhibit “A-1”, attached hereto and made part
thereof (the "demised premises"). Lessor represents and warrants to Lessee
that
the CBC Lease will expire on September 30, 2006, subject to existing renewal
or
extension options exercisable by CBC. Lessor covenants that it will not renew,
extend, amend or enter into a new lease with CBC without the prior written
consent of Lessee; provided, however, the parties acknowledge that CBC may
exercise its existing option to renew or extend the term of the CBC Lease.
If
Lessor and CBC do not enter into a new lease for the premises occupied by CBC,
or if CBC does not exercise its option to renew or extend the term of the CBC
Lease beyond September 30, 2006, Lessee shall have the option to lease such
space, at Lessee's option, on the same terms and conditions as currently set
forth in the CBC Lease, or on the terms and conditions set forth in this lease,
for the remainder of the term (including any renewals) of this lease. In
addition, from and after October 1, 2006, Lessee shall have the option to lease
from Lessor the office space currently leased by CBC. In the event Lessee
exercises such option by written notice to Lessor, Lessor shall be responsible
for removing CBC from such space and making any renovations or other
modifications necessary to accommodate CBC and Lessee, and upon delivery of
possession and use to Lessee, such office space shall then be added to and
considered as a part of the "demised premises" under this Lease, except the
rent
shall be proportionately increased to reflect the additional square
feet.
2. This
lease shall be for a term of 2 years commencing on the date hereof and ending
on
the second anniversary hereof. Lessee will have the right and option to renew
this lease for two (2) successive five (5) year terms upon the same terms and
conditions by giving Lessor written notice of its intention to renew this lease
at least ninety (90) days prior to the end of the original term or prior to
the
end of any renewal term.
3. Lessee
hereby covenants and agrees to pay Lessor as rent in monthly installments
without demand or counterclaim the sum of Ten Thousand and no/100 Dollars
($10,000.00) per month in advance on the first day of each and every month
during the initial term (prorated at the rate of $333.33 per day for any partial
month). The monthly rental to be paid for each and any renewal term shall be
a
commercially reasonable rental to be mutually agreed upon by Lessor and Lessee.
In the event Lessor and Lessee are unable to agree on a rental rate, then a
written opinion of an M.A.I. appraiser selected by the Lessor and Lessee as
to a
commercially reasonable rental rate shall be controlling. In the event the
selection of an appraiser cannot be agreed upon, the Lessor shall select one
M.A.I appraiser, the Lessee shall select one such appraiser, and the two
appraisers so selected shall select a third. The controlling rental rate shall
be the average of the three appraisals. The expense of the appraisals shall
be
equally divided between the Lessor and Lessee.
4. Lessee
shall cause to be paid all taxes, general or special, all public rates, dues
and
special assessments of any kind which shall become due and payable or which
are
assessed against or levied upon the demised premises during the term of this
lease calculated on the percentage of the total building square footage leased
by Lessee (prorated on the basis of a 360 day year for any partial calendar
year
of this lease). Such payments shall be due within 15 days after Lessee's receipt
of Lessor's invoice therefor.
5. Lessor
shall arrange to have all public utility services customarily used in the
operation of a commercial or industrial enterprise (including but not limited
to
water, sanitary sewer, gas, electricity, telephone, cable television or
communications services such as DSL or broadband) connected and available to
the
demised premises for Lessee's use at the commencement of the term. If the
parties agree in the future, Lessor shall arrange to establish separately
metered service for all such utility services not separately metered on the
date
of this lease, and Lessor,
unless otherwise agreed, shall pay for all
connection, tap-in and facility charges to establish such connection and
separate metering. Pending the establishment of separate meters, Lessee shall
pay or cause to be paid all charges for gas, water, sewage, disposal, steam,
electricity, light, heat or power, telephone or other communication service
used
or supplied in connection with the demised premises such cost to be offset
by
the historical utility costs for the building since the commencement of the
lease term under the CBC Lease.
6. As
part
of the consideration for this lease, Lessee covenants and agrees to maintain
at
its sole cost and expense at all times during the term of this lease, public
liability insurance under which Lessor shall be named as additional insured,
properly protecting and indemnifying Lessor, in an amount not less than One
Million Dollars ($1,000,000.00) for injury to any one person (including death),
and not less than One Million Dollars ($1,000,000.00) for personal injuries
in
any one (1) accident, and not less than Two Hundred and Fifty Thousand Dollars
($250,000.00) for property damage.
During
the term hereof, Lessee shall, at Lessee’s own cost and expense, provide and
keep in force insurance, under which Lessor shall be named as an additional
insured, against loss or damage or injury or destruction to any building or
buildings and appurtenances there, now and hereafter erected on the demised
premises, resulting from fire or from any hazard included in the normal broad
extended coverage endorsement, with such company or companies as may be
reasonably acceptable to Lessor in the amount at least equal to eighty percent
(80%) of the replacement value of said building or buildings and appurtenances
thereto.
Lessee
shall furnish Lessor with a certificate or certificates of insurance covering
all insurance so maintained by Lessee, stipulating that such insurance shall
not
be cancelled without ten (10) days advance notice to Lessor.
7. Lessee
shall use and occupy the demised premises as a business office, warehouse and
battery manufacturing facility and for any other lawful purpose or business.
Lessee represents and warrants to Lessor that it will occupy the demised
premises, and conduct its operations on the demised premises, in compliance
with
all applicable federal, state and local laws and regulations, including all
environmental laws and regulations.
8. (a) Lessor
represents and warrants to Lessee that it has good and marketable fee simple
title to the demised premises, free and clear of all liens, restrictions, and
encumbrances other than those which do not have a material adverse effect on
Lessee's intended use of the demised premises. Lessor has received no written
notice of violation of any law which remains uncorrected on the date hereof
and,
to Lessor's knowledge, the demised premises is in compliance with all applicable
laws and regulations. Lessor shall provide Lessee with a current and valid
certificate of occupancy for the demised premises simultaneously with the
execution of this lease.
(b) Except
as
otherwise provided in this lease, it is understood and agreed that Lessee
accepts the demised premises in the physical condition which the same now are
and that Lessor shall be under no obligation whatever to make any repairs or
replacements to the said premises during the term of this lease.
(c) Lessee,
at its sole expense, shall keep and maintain the structural and exterior
portions of the demised premises (including without limitation the walls,
ceilings, doors, foundations and roofs) in substantially the same condition
as
they are in on the date of this lease, ordinary wear and tear excepted. Lessee,
at its sole expense, shall also keep and maintain all mechanical systems serving
the demised premises (including the plumbing, electrical, sewer and HVAC systems
but excluding any assets owned by Lessee) in good operating order and repair.
Lessee, at its sole expense, shall also make the initial repairs set forth
on
Exhibit "B" attached hereto as Lessor and Lessee may agree to, and make any
necessary replacements and capital improvements which may be required to comply
with the foregoing covenants or which may be required by any law; provided,
however, in the event such replacements or capital improvements exceed,
individually or in the aggregate, $75,000, Lessee shall have the option to
make
such replacements or capital improvements or terminate this lease on 60 days
notice to Lessor. Except as otherwise set forth above, all such repairs and
replacements shall be made within 30 days after the date Lessee provides Lessor
with written notice of the need therefor, or immediately in the event such
condition constitutes a hazard, emergency or violation of any law.
(d) Except
as
otherwise provided in subsection (c) above, Lessee, at its sole expense, shall
make any and all other necessary repairs to the demised premises in order to
preserve, protect, and maintain the demised premises in substantially the same
condition as they are in on the date hereof, ordinary wear and tear excepted.
If
Lessee fails to make such repairs or fails to maintain properly the demised
premises, same may be made or done by Lessor at the expense of the Lessee and
the costs thereof shall be collectible as additional rent or otherwise and
shall
be paid by Lessee within five (5) days after rendition of a xxxx or statement
thereof.
9. No
installations, alterations, improvements, additions or changes of a structural
nature shall be made in or to the demised premises by Lessee without the prior
consent of Lessor. All installations, alterations, additions, or improvements
of
a permanent nature made by Lessee in the demised premises (except such trade
and
office fixtures and equipment of Lessee as may be removed without material
damage to the premises) shall, immediately upon being made or installed, become
the property of Lessor and shall remain upon and be surrendered with the demised
premises as a part thereof upon the expiration or earlier termination of this
lease, without disturbance or injury.
10. Lessee
shall not assign this lease or underlet the demised premises, or any part
thereof, without the prior written consent of Lessor, which consent shall not
be
unreasonably withheld.
11. Should
the demised premises be destroyed or rendered unfit for use and occupancy by
fire or other casualty, Lessee shall, at its option, either replace or repair
the same, or terminate this agreement.
12. If,
during the term of this lease, all of the demised premises should be taken
for
any public or quasi-public use under any law, ordinance, or regulation or by
the
right of eminent domain, or should be sold to the condemning authority under
threat of condemnation, this lease shall terminate and the rent shall be abated
during the unexpired portion of this lease, effective as of the date of the
taking of said premises by the condemning authority.
If
less
than all of the leased premises shall be taken for any public or quasi-public
use under any law, ordinance or regulation, or by right of eminent domain,
or
should be sold to the condemning authority under threat of condemnation, this
lease shall not terminate but Lessor shall forthwith at its sole expense,
restore and reconstruct the building and other improvements, situated on the
leased premises, provided such restoration and reconstruction shall make the
same reasonably tenantable and suitable for the uses for which the premises
are
leased and rent shall be equitably abated during such period; provided, however,
that if such restoration or reconstruction cannot reasonably be or is not
completed within 120 days following such taking, Lessee shall have the right
in
its sole option to terminate this lease. If not so terminated, the rent payable
hereunder during the unexpired portion of this lease shall be adjusted
equitably.
In
any
event, any condemnation award, or purchase price in lieu thereof, for the taking
of all or any portion of the premises shall be the property of Lessor whether
such award or purchase price shall be made as a compensation for diminution
in
value of the leasehold or for the taking of the fee, and Lessee hereby assigns
to Lessor all its right, title, and interest in and to any such award or
purchase price. Nothing contained herein, however, shall be deemed to preclude
Lessee from obtaining, or to give Lessor any interest in, any award to Lessee
for moving expenses or for loss or damage to lessee’s fixtures, equipment or
other property or for damages for cessation or interruption of Lessee’s
business.
13. Lessee
shall keep the demised premises in a neat and clean appearance and shall not
allow an accumulation of trash, waste or other refuse thereon.
14. If
Lessor
should fail to perform any of its obligations under this lease within the time
specified (or within thirty (30) days after written notice from Lessee if no
time is specified), Lessee may, at its option, terminate this lease or
perform
any such obligation (and
in
such event, Lessor's consent will not be required under Paragraph 9)
and
receive a credit against future rental payments due under this lease, in
addition to all other remedies provided by law or in equity for Lessor's
default.
15. The
occurrence of any of the following shall constitute material default and breach
of this lease by Lessee:
(a) A
failure
by Lessee to pay the rent reserved herein, or to make any other payment required
to be made by Lessee hereunder, where such failure continues for ten (10) days
after written notice thereof from Lessor to Lessee;
(b) A
failure
by Lessee to observe and perform any other provisions or covenants of this
lease
to be observed or performed by Lessee, where such failure continues for thirty
(30) days after written notice thereof from Lessor to Lessee provided; however,
that if the nature of the default is such that the same cannot reasonably be
cured within such thirty-day period, Lessee shall not be deemed to be in default
if Lessee shall within such period commence such cure and thereafter diligently
prosecutes the same to completion;
(c) The
making by Lessee of any assignment for the benefit of creditors; the
adjudication that Lessee is bankrupt or insolvent; the filing by or against
Lessee of a petition to have Lessee adjudged bankrupt or a petition for
reorganization or arrangement under any law relating to bankruptcy (unless,
in
the case of a petition filed against Lessee the same is dismissed within sixty
(60) days after the filing thereof); the appointment of a trustee or receiver
to
take possession of substantially all of Lessee’s assets located in the demised
premises or of Lessee’s interest in this lease (unless possession is restored to
Lessee within thirty (30) days after such appointment); or the attachment,
execution or levy against or other judicial seizure of, substantially all of
Lessee’s assets located in the demised premises or of Lessee’s interest in this
lease (unless the same is discharged within thirty (30) days after issuance
thereof).
16. In
the
event of any material default or breach of this lease by Lessee as set forth
in
paragraph 15 hereof, the rent reserved herein for the entire unexpired portion
of the term of this lease shall at the Lessor’s option thereupon immediately
become due and payable. To the extent permitted by law, Lessee shall be
obligated for such accelerated rent regardless of which, if any, of the remedies
provided in paragraph 17 hereof or provided by law Lessor elects to pursue.
17. In
the
event of any material default or breach of this lease by Lessee as set forth
in
paragraph 15 hereof; Lessor, at its option, may terminate this lease upon and
by
giving written notice of termination to Lessee, or Lessor, without terminating
this lease, may at any time after such material default or breach, without
notice or demand additional to that provided in paragraph 15 hereof, and without
limiting Lessor in the exercise of any other right or remedy which Lessor may
have by reason of such default or breach (other than the aforesaid right of
termination), exercise any one or more of the remedies hereinafter provided
in
this paragraph or as otherwise provided by law, all of such remedies (whether
provided herein or by law) being cumulative and non exclusive:
(a) Lessor
may enter the demised premises (to the extent permitted by law and without
thereby incurring any liability to Lessee and without such entry being
constituted an eviction of Lessee or termination of this lease) and take
possession of the demised premises and, at any time and from time to time relet
the demised premises or any part thereof for the account of Lessee, for such
terms, upon such conditions and at such rental as Lessor may deem proper. In
the
event of such reletting, (i) Lessor shall receive and collect the rent therefrom
and shall first apply such rent against such expenses as Lessor may have
incurred in recovering possession of the demised premises, placing the same
in
good order and condition, altering or repairing the same for reletting and
such
other expenses, commissions and charges, including attorney’s fees, which Lessor
may have paid or incurred in connection with such repossession and reletting,
and then shall apply such rent against the accelerated rent. No re-entry by
Lessor shall be deemed to be an acceptance of a surrender by Lessee of this
lease or of the demised premises.
18.
The
failure or delay on the part of Lessor or Lessee to enforce or exercise at
any
time any of the provisions, rights, or remedies in this lease shall in no way
be
construed to be a waiver thereof, nor in any way to effect the validity of
this
lease or any part hereof, or the right of Lessor or Lessee, as the case may
be,
to thereafter enforce each and every such provision, right to remedy. No waiver
of any breach of this lease shall be held to be a waiver of any other or
subsequent breach. The receipt by Lessor of rent at a time when the rent is
in
default under this lease shall not be construed as a waiver of such default.
The
receipt by Lessor of a lesser amount than the rent due shall not be construed
to
be other than a payment on account of the rent then due, nor shall any statement
on Lessee’s check or any letter accompanying Lessee’s check be deemed an accord
and satisfaction, and Lessor may accept such payment without prejudice to
Lessor’s right to recover the balance of the rent due or to pursue any other
remedies provided in this lease. No act or thing done by Lessor or Lessor’s
agents or employees during the term of this lease shall be deemed an acceptance
or a surrender of the demised premises, and no agreement to accept such a
surrender shall be valid unless in writing and signed by Lessor.
19. Lessor
reserves the right to assign this lease at any time, including the assignment
of
rent as security, and Lessee hereby agrees to make payments of rent to any
party
to whom such an assignment is made upon written request of Lessor.
20. Lessor
shall have the permission at any reasonable time or times upon reasonable prior
notice (except in the event of an emergency) to enter upon the demised premises
for the purpose of making inspections and to make repairs, in the event Lessor
should determine to make such repairs, or for the purpose of protection of
such
premises.
21. At
the
expiration of the original term of this lease or any extension of such term
by
Lessee, Lessee shall surrender the demised premises to Lessor in the same
condition as when Lessee took possession of such premises, ordinary wear and
tear excepted.
22. If
Lessee
holds over without written consent of Lessor after expiration or termination
of
the original term of the lease or any extension of such term by Lessee, Lessee’s
holdover shall be at the will of Lessor.
All
notices provided to be given under this agreement shall be given by messenger,
reliable express delivery service, telecopier or certified mail or registered
U.S. mail, addressed to the proper party at the following address:
LESSOR: LESSEE:
Xxxxxx
X.
Xxxx and Axion
Battery Products, Inc.
Xxxxxx
X.
Xxxxxx Attn:
Xxxxxx X. Xxxxxxxxx, CEO
Box
202 0000
Xxxxxxxxxx Xxxx
Xxx
Xxxxxxxxxx, XX 00000 Xxx
Xxxxxx, XX 00000
Fax:
Fax:
With
a
copy to: With
a
copy to:
Xxxxxxx
X. Xxxxxxxx, Xx., Esq.
Xxxxx
& Xxxxxxx, P.C.
00
Xxxxxxx Xxxxxx, 00xx
Xxxxx
Xxxxxxxxxx,
XX 00000
Fax:
000-000-0000
Notices
shall be deemed to have been given on the date of receipt by the addressee
(or,
if the date of receipt is not a business day, on the first business day after
the date of receipt), as evidenced by (i) a receipt executed by the
addressee (or a responsible person in his or her office) or a notice to the
effect that such addressee refused to accept such communication, if sent by
messenger, U.S. mail or express delivery service, or (ii) a receipt
generated by the sender's telecopier showing that such communication was sent
to
the appropriate number on a specified date, if sent by telecopier.
24. At
Lessee’s request, Lessor agrees to execute a Memorandum of Lease in such form as
may be recorded in the Office of the Recorder of Deeds of Xxxxxxxx County,
Pennsylvania.
25. If
and so
long as Lessee pays the rent and observes and performs all of the covenants,
conditions and provisions on Lessee's part to be observed and performed
hereunder, Lessee shall and may peaceably and quietly have, hold and enjoy
the
Premises for the term and any renewal or extension thereof, subject nevertheless
to all of the provisions of this lease. Lessor covenants that no other lessees
of Lessor occupying any portion of Lessor's property shall unreasonably
interfere with the business or operations of Lessee; provided, however, Lessee
acknowledges that CBC is currently in possession and use of the premises leased
under the CBC Lease.
WITNESS
the following signatures and seals:
|
WITNESS:
|
LESSOR:
Xxxxxx
X. Xxxx
Xxxxxx
X. Xxxxxx
|
|
ATTEST:
|
LESSEE:
AXION
BATTERY PRODUCTS, INC.
By:
Xxxxxx
X. Xxxxxxxxx
CEO
and President
|
1048999_1
