EXHIBIT 10.5
THIRD AMENDMENT
TO LEASE AGREEMENT
THIS THIRD AMENDMENT to lease agreement is dated as of the 15th day
of August, 1994, and entered into by and between Xxxxxx X. Xxxxxx ("Lessor")
and CTI INDUSTRIES CORPORATION, a Delaware corporation ("Lessee").
W I T N E S S E T H:
WHEREAS, Lessor and Lessee have heretofore entered into a lease
agreement dated as of the 14th day of October, 1987, (the "Original Lease"),
as amended by that certain first amendment to lease agreement dated as of July
26, 1988 (the "First Amendment") (the Original Lease and the First Amendment
are hereinafter collectively referred to as the "Lease") wherein the Lessee
has agreed to lease from the Lessor premises located at 000 Xxxxxxxxxx Xxxxx,
Xxxx, Xxxxxxxx containing approximately 59,894 square feet;
WHEREAS, the parties are desirous of extending the term of the Lease
to and including December 31, 1999 and providing for a new rental rate and
such other amendments and modifications as are hereinafter provided;
NOW, THEREFORE, in consideration of the mutual covenants and premises
hereinafter set forth, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. To the extent that the terms and conditions of the Third Amendment
are inconsistent with the terms and conditions of the Lease, the terms and
conditions of this third Amendment shall control.
2. Commencing January 1, 1995, and for each month thereafter through
and including December 31, 1999, monthly Base Rent shall be as follows:
Months 01 through 60 - $17,032.00 per month
3. Paragraph 6 of the Original Lease is hereby deleted in its
entirety and replaced by the following:
"For each month of the leased term, Lessee shall pay to Lessor
Lessee's pro-rata share of real estate taxes, as additional rent,
promptly without demand in an amount to be estimated by Lessor and in
the event Lessor is required under any mortgage covering part or all
of the Building to escrow real estate taxes, Lessor may use the
amount required to be so escrowed as the basis of its estimate and to
be adjusted at the end of each lease year based upon Lessor's actual
costs. If Lessee has paid less than the amount due, Lessee shall pay
the difference within 10 days of receipt of notice by Lessor."
1
4. For each lease year of the leased term, or such period of time
Lessee shall have the right of possession of the Premises, Lessee shall pay to
Lessor Lessee's pro-rata share of insurance charges as additional rent,
promptly, without demand, in an amount to be estimated by lessor and to be
adjusted at the end of each lease year based upon Lessor's actual cost thereof
(the "Insurance Payment"). An amount equal to 1/12 of Lessor's estimate of the
current Insurance Payment shall be payable in advance during the term of the
Lease on the first day of each calendar month and a proportionate sum for the
partial month, if any, at the commencement of the leased term based upon the
total square footage of the Premises. The Insurance Payment shall consist of
all items of cost and expense that keep the Building in lessor's judgement
fully insured including but not limited to the cost of premiums for "All Risk"
insurance equal; to ISO Special Forms and based upon General Liability
insurance in the minimum amount of $1,000,000.00 per occurrence BI,
$2,000,000.00 policy aggregate and $1,000,000.00 per occurrence for property
damage. Loss of Rents and if the exposure exists, boiler and machinery
insurance in the amount of $2,000,000.00 and any other cost incurred in the
placing of this insurance.
5. For each lease year of the leased term, Lessee shall pay to Lessor
in the manner hereafter provided, its pro-rata share of common area charges
(as hereinafter defined). As used in this Lease the term "Common Area Charges"
means the total of all items of costs and expenses expended (including
appropriate reserves) in operating, managing, equipping, protecting, policing,
lighting, repairing, replacing, and maintaining the Building and the common
areas thereof (including the parking areas) including but not limited to all
costs and expenses for or pertaining to:
(1) Security, fire protection and traffic direction and control;
(2) Cleaning and removal of rubbish, dirt, debris, snow and ice;
(3) Planting, replanting and replacing flowers and landscaping;
(4) Water, drainage and sewerage;
(5) Permits and licenses;
(6) Supplies; and
(7) Utility services and lighting for common areas.
6. Lessee shall, at Lessee's own expense comply with any current or
hereinafter enacted environmental-clean-up responsibility laws affecting
Lessee's operation at the Premises (the "Clean-Up laws"). Lessee shall, at
Lessee's own expense, make all submissions to, provide all information to, and
comply with all requirements of the appropriate governmental authority (the
"Authority") under the Clean-Up Laws. Should the Authority determine that a
clean-up plan be repaired and that a clean-up be undertaken because of any
spills or discharges of hazardous substances or wastes at the premises which
occur during the term of this Lease, then Lessee shall, at Lessee's own
expense, prepare and submit the required plans and financial assurances and
carry out the approved plans. Lessee's obligations under this paragraph shall
arise if there is any closing, terminating or transferring of operations of an
industrial establishment at the Premises pursuant to the Clean-Up Laws. At no
expense to Lessor, Lessee shall promptly provide all information requested by
Lessor for preparation of affidavits required by Lessor to determine the
applicability of the Clean-Up Laws to the Premises, and shall sign the
affidavit promptly when requested to do so by Lessor. Lessee shall indemnify,
2
defend and hold harmless Lessor, its beneficiaries, employees, agents and
assigns, from all fines, suits, procedures, claims and actions of any kind
arising out of or in any way connected with any spills or discharges of
hazardous substances or wastes at the Premises that occur during the term of
this Lease or while Lessee is in possession of any portion thereof, and from
all fines, suites, procedures, claims and actions of any kind arising out of
Lessee's failure to provide all information, make all submissions and take all
steps required by the Authority under the Clean-Up Laws or under any other
environmental law. Lessee's obligations and liabilities under this paragraph
shall continue so long as Lessor remains responsibility for any spills or
discharges of hazardous substances or wastes a the Premises that occur during
the term of this Lease or Lessee's occupancy of any portion thereof. Lessee's
failure to abide by the terms of this paragraph shall be restrainable by
injunction. Notwithstanding the foregoing provisions of this paragraph 6,
Lessor represents and warrants to Lessee that, as of the commencement date of
the original Lease, there were not present in or upon the building or premises
of the Lease any toxic or hazardous substances or any other waste materials in
violation of any federal or state environmental laws or regulations. Lessor
agrees that (i) Lessor solely shall be responsible and liable for, and shall
perform and pay for all costs of clean up of the Premises with respect to any
waste material or toxic or hazardous materials which shall have been in or
upon the building or property comprising the premises under the Lease as of
the date of commencement of the Original Lease or which shall have been placed
or deposited by Lessor or any of Lessor's employees or agents thereafter and
(ii) Lessor shall indemnify and hold Lessee harmless of and from, and shall
defend Lessee against any and all claims, actions, proceedings, liabilities,
costs, damage, loss or expense which shall be caused by, arise out of or
result from, the presence, disposal or deposit of such materials on the such
premises.
7. Except as hereinafter provided, the Lease remains unmodified and
is hereby ratified and confirmed.
8. The term of this lease is hereby extended to and including
December 31, 1999.
LESSOR:
_____________________________
Xxxxxx X. Xxxxxx
Attest:_______________________
LESSEE: CTI INDUSTRIES CORPORATION
By:__________________________
Attest:_______________________
3
