EXHIBIT 10.5
PLASTIC PALLET PRODUCTION, INC.
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LEASE AGREEMENT
THIS LEASE AGREEMENT, made and entered into this fifth day of April 1999, by
and between Onward, L.L.C., hereinafter referred to as "Lessor," and Plastic
Pallet Production, Inc., hereinafter referred to as "Lessee".
WITNESSETH:
WHEREAS, Lessor owns the following described real estate and premises situated
in Cleveland County, Oklahoma, to wit:
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and is entitled to lease same, and,
WHEREAS, the said real estate property is improved and there is situated
thereon an office building.
NOW, THEREFORE, in consideration of the mutual covenants and obligations of
the parties hereinafter set forth, to be faithfully kept and performed by
them, it is hereby mutually understood, covenanted and agreed as follows:
PROPERTY LEASED
This lease shall cover the space known as 73,400 sq. ft. shop area at ▇▇▇▇ ▇.
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TERM OF LEASE
This lease shall be for a term of one (1) year and, which term shall begin on
the first day of the month of April, 1999. Same shall not be renewed or
extended except in accordance with the provisions hereof.
RENTAL PROVISIONS
As consideration for the leasing of said premises and occupancy thereof,
Lessee hereby agrees to pay Lessor the sum of Twelve Thousand, Two Hundred,
Thirty-four Dollars and 83/100 ($12,234.83) per month payable in advance in
cash or by check on the first day of each month.
ALTERATIONS, REPAIRS AND MAINTENANCE
OF CONSISTENT DECORATING SCHEME
Lessee agrees to keep and maintain the leased premises neat and in as good
condition, order and state of repair as at the beginning of the lease term,
save and except the usual wear and tear and depreciation. Lessee shall pay for
the cost of any repairs to the building where the leased premises is located
made necessary by the negligence of the Lessee, or by agents, servants,
employees, or invitees of Lessee.
Due to the unique character of the building, Lessee shall not be permitted to
make alterations, changes or improvements on the leased premises without the
prior written permission of Lessor. No alterations, change or improvement
shall be made without the prior written approval of Lessor. If in the opinion
of the Lessor, Lessee shall allow the leased premises to become disorderly
Lessor shall notify the Lessee in writing and if Lessee fails to cure such
defect within 30 days, Lessee shall be in default hereunder.
No work shall be done on the premises without approval of Lessor and only
Lessor's approved contractors and tradesmen shall perform the work. If artwork
or other items are placed on the walls, then the Lessee shall be responsible
for the cost incurred by the Lessor to paint and repair the walls at the end
of the lease term.
NO ASSIGNMENT OR SUBLEASE
Lessee shall not assign this lease, nor shall Lessee sublet the premises or
any part thereof, without the prior written approval of Lessor.
SUBORDINATION
This lease shall be subordinate to any mortgage that may hereinafter be placed
upon the premises and to any and all advances to be made thereunder and to the
interest thereon and to all renewals, replacements and extensions thereof.
Lessee shall upon written demand by Lessor, execute and deliver such
instruments as may be required at any time and from time to time to
subordinate the rights and interest of Lessee under this lease to the lien of
any mortgage placed upon the leased premises or upon the real property of
which the leased premises are a part, at any time and from time to time,
whether before or after the commencement of this lease during the term thereof.
FIRE CLAUSE
If the building where the leased premises are located shall, during the term
of this lease, be so damaged by fire, storm, tornado or explosion as to
substantially destroy either the leased premises or the building where the
leased premises are located, then Lessor shall have the option either to
terminate the lease, or to rebuild and restore the premises to good and
tenantable conditions for the Lessee's occupancy. In the event Lessor elects
to terminate the lease under such circumstance, then Lessee shall vacate the
leased premises and shall be under no further obligation for the payment of
rental. In the event Lessor elects to restore and rebuild the building and
premises, then the rental shall be abated proportionately for the period of
time that the
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Lessee is deprived of possession which such rebuilding and repair is being
accomplished. In the event damage shall occur to the building from such fire
or other hazard during the term of this lease, and if the same does not result
in the substantial destruction of either the leased premises or the building
where the leased premises are located then the Lessor shall be obligated to
restore the leased premises to good, serviceable, and tenantable condition,
equal to the condition of the leased premises immediately prior to such
damage, and under such circumstances, Lessee shall be entitled to a just and
proportionate reduction in the rental until the leased premises has been
restored and put in such pre-existing condition.
UTILITIES AND MAINTENANCE
Lessee shall pay all bills for light, heat, water and power furnished to the
leased premises. Lessee shall provide, and pay for the janitorial service for
leased premises. Lessee shall pay his telephone bills and all other bills.
TAXES, INSURANCE AND INDEMNITY
Lessor shall pay all ad valorem and other taxes assessed against the above
described building and leased premises during the term of the lease; provided,
Lessee shall pay all taxes upon all of Lessee's personal property located on
the leased premises.
Lessor shall carry and maintain such fire and extended coverage insurance on
the building, fixtures and leased premises as Lessor may determine advisable,
at the expense of the Lessor, and in the event of any loss or destruction, all
of the proceeds of any such policy of insurance shall be payable to the Lessor
alone.
Lessee shall carry such insurance as Lessee may deem advisable, at the expense
of Lessee, on any and all improvements, stock, merchandise, fixtures or other
personal property of Lessee contained in the building, and the proceeds of any
loss thereunder shall be payable to Lessee alone.
In the event any activity of Lessee or any approve improvement made by Lessee
to the leased premises results in an increased fire insurance rate, then in
addition to the above stipulated rental, the Lessee shall pay the increase in
the fire insurance premiums caused by such activity, change or improvement.
During the term hereof, Lessee shall maintain in full force and effect at all
times, for the benefit of Lessee and Lessor, as their respective interest may
appear, public liability and property damage insurance issued by a fully
qualified insurance company or companies for the leased premises, with limits
of at lease $100,000.00 with respect to death of or injury to any one person,
$300,000.00 with respect to death of injury in any one accident, and
$100,000.00 with respect to loss or destruction of or damage to property.
Lessee, shall, upon request, furnish to Lessor appropriate certificates of
each insurance. Lessee hereby indemnifies and agrees to hold Lessor harmless
from any and all costs, including attorney's fees, loss, damage or expense
arising out of death of or injury to persons, or loss of or damage to property
in connection with the occupancy of the leased premises by Lessee. Lessor
shall not be liable for damage to any of Lessee's
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property located in the leased premises caused by fire, burst, stopped or
leaking water, gas, plumbing fixtures or sewer pipes or from any failure to
properly deliver any utility service to the lease premises, unless it be shown
that Lessor shall have been guilty of gross negligence.
It is understood and agreed that Lessee intends to use the premises for
manufacturing. No other business or occupation shall be conducted hereon
without the prior written consent of Lessor. Any business of any kind operated
upon the premises shall be in accordance with all applicable ordinances and
statutes.
DEFAULT BY LESSEE
In the case of default by Lessee in the performance of any promise, covenant
or agreement contained in this lease or in case of a violation of any of the
rules and regulations hereafter promulgated by Lessor, and should Lessee fail
to remedy such default or violation within ten (10) days after mailing a
written notice to Lessee, the Lessor may terminate this lease, re-enter the
demised premises and remove all persons therefrom and store all personal
property found therein at the expense of Lessee without being deemed guilty of
trespass and without prejudice to any remedies for back rent or other breaches
of this agreement, or the Lessor after reassuming possession endeavor to
re-let the premises for the remainder of the unexpired term at the best rent
available for the account of Lessee who shall remain liable for any deficiency.
SURRENDER
At the expiration of the term of this lease, or upon any sooner termination
thereof, the Lessee herein shall remove all of his goods, wares, merchandise,
furniture and fixtures from the leased premises, and will peaceably yield unto
the Lessor the said leased premises in as good order, repair and condition as
when delivered by Lessor, ordinary wear and tear and damage by the elements
alone excepted. Lessee must repair any holes or other damage left after
removal of any items owned by Lessee. All improvements made to the leased
premises shall belong to Lessor and may not be removed by Lessee.
ATTORNEY'S FEES
Should either party hereto institute any action or proceeding in court to
enforce any provisions hereof or for damage by reason of alleged breach of any
provisions of this lease or for a declaration of such party's rights or
obligations hereunder, or for any other judicial remedy, the prevailing party
shall be entitled to receive from the losing party such amount as the court
may adjudge to be reasonable as attorney fees for the services rendered to the
party ultimately prevailing in any such action or proceeding.
PROTECTION FROM LIENS
Lessee shall keep the demised premises at all times during the term hereof
free of Mechanic's Liens and Materialman's Liens or other liens of like nature
other than liens created or claimed by reason of any work done by or at the
instance of Lessor, and Lessee shall at all times fully protect and indemnify
Lessor against all such liens or claims which may ripen into liens and
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against all attorney's fees and other costs and expenses growing out of or
incurred by reason of or on account of any such claim or lien.
NOTICES
All demands and notices of any kind which are permitted or required to be
given hereunder shall be deemed duly given when deposited in the United States
mail, postage prepaid, properly addressed and certified (with return receipt
requested) in the case of notice by Lessee, to Lessor at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇.
▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and in case of notice by Lessor to Lessee at ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. Either party may at any time and from time
to time designate a different address by advising the other party thereof in
writing, following which the address so designated shall be deemed to be the
address of the party giving such advice, for the purpose hereof.
LIEN OF LESSOR
To secure the performance of all obligations due and owing from Lessee to
Lessor hereunder, including the payment of rent, Lessor shall have and is
hereby given a lien upon all furniture, fixtures, goods, wares and merchandise
owned by the Lessee situated in or upon the demised premises.
ACCESS BY LESSOR
Lessee shall permit Lessor and its agents to enter upon the leased premises at
any reasonable time for the purpose of inspecting same, or for the purpose of
maintaining the building in which the leased premises are situated, or for the
purpose of making repairs, alterations or additions to any other portion of
the building.
RULES AND REGULATIONS
Lessee agrees to comply with the Rules and Regulations which Lessor may from
time to time prescribe in regard to the care and cleanliness of the building
and grounds where the leased premises are located and in regard to the comfort
and convenience of other occupants of said building. Lessor's Rules and
Regulations regarding the cleanliness and orderliness of the building and
grounds and the Rules and Regulations relating to the consistent decorating
scheme are final. After notice and thirty (30) days to cure, if the Lessee is
not in compliance with the Rules and Regulations, the Lessee will be in
default of the lease. The Rules and Regulations are at the discretion of the
Lessor and may change at any time.
BINDING EFFECT
This lease shall be for the benefit of and be binding upon the parties hereto
and their respective heirs, executors, administrators, devisees successors and
assigns.
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IN WITNESS WHEREOF, the parties have executed this lease the day and year
first above written.
Onward, L.L.C.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Manager
Plastic Pallet Production:
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
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[ONWARD, L.L.C. LOGO]
April 8, 1999
Plastic Pallet Production, Inc.
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Dear Sirs,
Onward, L.L.C. grants to Plastic Pallet Production, Inc. for a period of three
(3) years following the closing date April 5, 1999, the option to repurchase
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Pallet Production, Inc. and may not be assigned, pledged or granted. The
purchase price of the property under this option is $2,700,000.00. All
expenses to be paid for by Plastic Pallet Production, Inc.
Sincerely,
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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PAK/jb
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