Exhibit 10.18
LEASE AGREEMENT THIS LEASE AGREEMENT ("Lease") is made as of January 10, 2001,
by and between Maverick Tube Corporation, a Delaware corporation ("Landlord"),
and Commercial Resins Company, Inc., an Oklahoma corporation ("Tenant").
DEMISED PREMISES
Premises. Landlord, for and in consideration of the rents, covenants and
agreements hereinafter reserved, mentioned and contained on the part of Tenant,
to be paid, kept, observed and performed, by these presents does lease, rent,
let and demise unto Tenant, and Tenant does hereby take and hire, upon and
subject to the conditions and limitations hereinafter expressed, approximately
twenty (20) acres of land (exact acreage to be determined after construction of
the Railroad Spur described in Section 21.17 hereof) situated at Landlord's
facility in ▇▇▇▇▇▇▇, Arkansas, as described in Exhibit A, attached hereto and
made a part hereof, together with all improvements thereon or to be constructed
thereon, as hereinafter provided (the "Demised Premises").
TERM OF LEASE Initial Term.
The term of this Lease ("Term") shall commence on the date of this Lease (the
"Commencement Date") and shall end December 31, 2005, (the "Expiration Date")
unless terminated sooner pursuant to provisions of this Lease. The Term as set
forth above is sometimes referred to as the "Initial Term".
Extension Terms. Provided Tenant is not in default hereunder, Tenant shall
have the right to extend the term of this Lease for two (2) additional five
(5) year periods commencing on the Expiration Date of the Initial Term and
ending five (5) years later for the first extension term and commencing
five (5) more years later for each successive extension term (sometimes
referred to as an "Extension Term"), and the end of each such five (5) year
Extension Term shall become the Expiration Date and the Term, as extended,
shall become the "Term" of this Lease. Such extensions shall be upon the
same terms and conditions as herein set forth for the Initial Term of this
Lease, except that the Base Rent (as defined below) payable during each
such Extension Term shall be as described in 0 of this Lease. In order to
exercise the foregoing right to extend, Tenant must serve notice of
exercise upon Landlord not later than nine (9) months prior to the
expiration of the Initial Term of this Lease in the case of the first
Extension Term nor later than nine (9) months prior to the expiration of
the Extension Term in the case of each successive Extension Term, whereupon
the Term of this Lease shall be extended for the period aforesaid without
further act or instrument.
CONSTRUCTION OF IMPROVEMENTS
Plans and Specifications. Landlord agrees to furnish all of the material
and labor and to do all things necessary for the construction of a building
and related improvements (together, the "Building") on the Demised Premises
at Landlord's sole cost and expense. The Building shall be constructed in a
good and workmanlike manner in accordance with Preliminary Plans and
Specifications, and any correspondence amending the same, described in
Exhibit B attached hereto and made a part hereof, in accordance with
applicable building and zoning regulations as the same are presently
enforced by the governmental bodies having jurisdiction thereof. Landlord
agrees to forthwith prepare Final Plans and Specifications in accordance
with Exhibit B and in accordance with applicable building and zoning
regulations and submit the same to Tenant for Tenant's approval. Tenant
agrees that it will not withhold its approval except for just and
reasonable cause and will not act in an arbitrary or capricious manner with
respect to the approval of the Final Plans and Specifications. When the
Final Plans and Specifications have been approved by Landlord and Tenant by
affixing thereon the signature of an authorized officer or employee of each
of the respective parties, the Final Plans and Specifications shall be
attached to each party's copy of this Lease and shall supercede the
Preliminary Plans and Specifications. Landlord agrees to appoint a
competent and experienced engineer to work with Tenant in the design of the
Building so that the same will meet the requirements of Tenant and Tenant
agrees to appoint an officer or employee of Tenant to work with Landlord in
the design of the Building. If Tenant requests a change order for the
Building after approval by both parties of the Final Plan and
Specifications but prior to completion of the Building and Landlord
approves such change order, Tenant shall bear the cost of such change
order; provided, however, that the net cost or saving of all such change
orders shall be determined upon completion of the Building and if the total
cost of change orders exceeds the savings of change orders, Tenant shall
pay to Landlord such excess of cost over savings within thirty (30) days of
Tenant's receipt from Landlord of an invoice for the same.
Completion Date. Landlord shall diligently proceed with the construction of
the Building and complete the same and deliver possession thereof pursuant
to the construction timetable that is part of the Final Plans and
Specifications; provided, however, if delay is caused or contributed to by
act or neglect of Tenant, or those acting for or under Tenant, or labor
disputes, casualties, acts of God, the public enemy, governmental embargo,
restrictions, action or nonaction of public utilities, or of local, state
or federal government affecting the work, or other causes beyond Landlord's
control, then the time of completion shall be extended for the additional
time caused by such delay. Landlord shall secure at its cost all
governmental permits necessary for use and occupancy of the Building except
those which are related to the specific purpose for which the Building will
be used by Tenant. The Completion Date of the Building shall be the date on
which the Building is completed and ready for occupancy and all occupancy
permits required to be obtained by Landlord have been delivered to Tenant
and the Railroad Spur described herein has been completed and connected
with a railroad line so as to be usable by Tenant for the purpose for which
the Demised Premises may be used by Tenant. Landlord and Tenant shall
execute a joint letter within ten (10) days after the Completion Date
stating the Completion Date.
Occupancy. Tenant shall not be obligated to Landlord for the payment of
Base Rent under this Lease until the Completion Date, save and except if
the Building is partially ready for occupancy Tenant may, but need not,
occupy the same, paying as rental a pro rata portion of the Base Rent in
accordance with the area of the Building occupied by Tenant. Tenant shall
be allowed to install its fixtures, equipment and other personal property
during the final stages of completion of the Building so long as Tenant
does not unreasonably interfere with the completion of construction or
occasion any labor dispute as a result of its work. Delay in putting Tenant
in possession of the Building shall not serve to make Landlord liable for
any damages arising therefrom.
Guarantee. Landlord guarantees the Building against defective workmanship
and/or materials and (as of the Completion Date) noncompliance with any
applicable law, statute, ordinance, rule, or regulation (the "Guarantee")
for a period of one (1) year from the Completion Date (the "Guarantee
Period") and Landlord agrees, at its sole cost and expense, to repair or
replace any defective item covered by the Guarantee during the Guarantee
Period. In the event the Final Plans and Specifications provide for a
longer period than the aforesaid Guarantee Period for an item then the
Final Plans and Specifications shall control and the period therein shall
be deemed the Guarantee Period for the item. Any warranties or guarantees
by any supplier of material and labor which extend beyond the Guarantee
Period shall be assigned to Tenant at the end of the Guarantee Period.
Incomplete Items. Within a period of sixty (60) days after the Completion
Date, Tenant shall notify Landlord of all items not completed in accordance
with the Final Plans and Specifications ("Incomplete Items"), and Landlord
shall forthwith complete the Incomplete Items.
Acceptance of Demised Premises. Save and except for the Guarantee for the
Guarantee Period, or such additional guarantees as may be provided for in
the Final Plans and Specifications, and save and except for the Incomplete
Items, Tenant, upon occupying the Building, shall have and hold the
Building as the same shall then be without any liability or any obligation
on the part of Landlord for making any alterations, improvements or repairs
of any kind in or about the Building for the Term of this Lease.
RENTAL
Base Rent. In consideration of the leasing of the Demised Premises, and in
consideration of the construction referred to in 0 hereof, Tenant agrees to pay
Landlord, at the office of Landlord at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ or at such other place as Landlord may from time to time
designate in writing, a rental ("Base Rent") payable monthly as described on
Exhibit C, attached hereto and made a part hereof. Base Rent shall commence on
the first day after the Completion Date. Tenant shall commence payment of Base
Rent five business days after the Completion Date and continuing on the first
day of each month thereafter as described on Exhibit C for the next succeeding
months during the balance of the Term.
Late Payments. Any installment of Base Rent or any other payment due from Tenant
to Landlord accruing under the provisions of this Lease which shall not be paid
within five (5) days after the date when due shall bear interest at the rate of
twelve percent (12%) per annum, from the date when the same is due hereunder
until the same shall be paid, plus a late charge equal to 5% of the installment.
Prorated Payments. If the Completion Date or Expiration Date occur on a date
other than the first day or last day of a calendar month, respectively, monthly
payments with respect to such months shall be prorated on the basis of the
number of days in each such month which are included in the Term.
USE OF DEMISED PREMISES
Use. The Demised Premises, the Building and all buildings or other improvements
hereafter erected upon the Demised Premises, shall be used for pipe coating and
for equipment, storage, warehousing, distribution and offices in conjunction
therewith and for no other purpose. Tenant shall not use or occupy the same, or
knowingly permit them to be used or occupied, contrary to any statute, rule,
order, ordinance, requirement or regulation applicable thereto, or in any manner
which would violate any certificate of occupancy affecting the same, or which
would cause structural injury to the improvements or cause the value or
usefulness of the Demised Premises, or any portion thereof, substantially to
diminish (reasonable wear and tear excepted), or which would constitute a public
or private nuisance or waste, and Tenant agrees that it will promptly, upon
discovery of any such use, take all necessary steps to compel the discontinuance
of such use. Tenant shall operate on the Demised Premises in accordance with
coating manufacturers' recommendations and industry quality standards, and shall
obtain ISO 9000 certification within one year of occupancy and maintain such
certification during the Term of this Lease.
TAXES, ASSESSMENTS AND OTHER IMPOSITIONS
Impositions. Tenant covenants and agrees to pay as Additional Rent, before any
fine, penalty, interest or cost may be added thereto for the nonpayment thereof,
all real estate taxes, installments of special assessments payable during the
Term of this Lease, excises, levies, license and permit fees, other governmental
charges, and all other charges or burdens of whatsoever kind and nature, without
particularizing by any known name or by whatever name hereafter called, and
whether any of the foregoing be general or special, ordinary or extraordinary,
foreseen or unforeseen, of any kind and nature whatsoever, including, but not
limited to, assessments for public improvements or benefits, which shall during
the Term be laid, assessed, levied or imposed upon, or become payable and a lien
upon the Demised Premises, or any part thereof (all of the foregoing hereinafter
referred to as "Impositions"). Any Imposition charged against the Demised
Premises and other property shall be prorated based upon the basis for such
Imposition (whether value, area or otherwise). Nothing herein contained shall be
construed as obligating Tenant to pay Impositions that may be payable before the
commencement or after the expiration of the Term of this Lease. Anything herein
to the contrary notwithstanding, Landlord shall pay that portion of Impositions
due and payable in respect to the Demised Premises during the year the Term
commences and the year in which the Term ends which the number of days in the
year not within the Term of this Lease bears to 365, and Tenant shall pay the
balance of the Impositions during that year.
INSURANCE
Coverage Required. Commencing with the Completion Date, Tenant, at Tenant's sole
cost and expense, shall during the remainder of the Term keep the Building and
all improvements appurtenant thereto, and all fixtures therein, insured for the
benefit of Landlord, as the named Insured, in an amount equivalent to one
hundred percent (100%) of the then full replacement cost thereof (excluding
foundation and excavation costs), (i) against loss or damage by fire, and (ii)
against such other risks of a similar or dissimilar nature, as are or shall be
customarily covered with respect to buildings similar in construction, general
location, use and occupancy to the Building, including, but not limiting the
generality of the foregoing, windstorm, hail, explosion, vandalism, riot and
civil commotion, damage from vehicles, smoke damage, and such other damage as
may be reasonably deemed necessary by Landlord, provided such other coverage is
obtainable, and provided further that such other coverage is such as is
customarily obtained with respect to buildings similar in construction, general
location, use and occupancy to the Building. These insurance provisions shall in
no way limit or modify any of the obligations of Tenant under any provision of
this Lease. Such full replacement cost shall be determined from time to time,
but not more frequently than once in any three (3) years, at the request of
Landlord, by an appraiser, engineer, architect or contractor designated and paid
by Tenant and approved in writing by Landlord. No omission on the part of
Landlord to request any such determination shall relieve Tenant of any of its
obligations under this paragraph. The insurance policy or policies required by
this section 7.1 may, at Tenant's option, name Tenant as an additional insured.
Coverage Amounts. Tenant, at its sole cost and expense but for the mutual
benefit of Landlord and Tenant, shall maintain, or cause to be maintained:
Comprehensive bodily injury and property damage liability insurance against
claims for bodily injury, death or property damage, occurring in, on or about
the Demised Premises and the Building, and in, on or about any adjoining street,
avenue, property and passageway, naming Landlord and Tenant as the Insureds,
such insurance to afford minimum protection during the term of this Lease of not
less than Five Million and 00/100 Dollars ($5,000,000.00) single limit coverage
in respect to bodily injury or death to any persons and property damage on an
occurrence basis;
Boiler and pressure vessel (including, but not limited to, pressure pipes, steam
pipes and condensation return pipes) insurance, provided the Building contains a
boiler or other pressure vessel or pressure pipes, in an amount reasonably
required by Landlord; and
Such other insurance, and in such amounts as may from time to time be reasonably
required by Landlord, against other insurable hazards which at the time are
commonly insured against in the case of demised premises and buildings similar
in construction, general location, use and occupancy.
Additional Requirements. All policies of insurance relating to fire, windstorm
and extended coverage shall provide that the proceeds thereof shall be payable
to Landlord and if Landlord so requires shall also be payable to the holder of
any mortgage now or hereafter becoming a lien on the fee of the Demised
Premises, or any part thereof, as the interest of such holder appears, pursuant
to a standard mortgagee clause. All such policies of insurance shall provide
that any loss shall be payable to Landlord notwithstanding any act or omission
of Tenant which might otherwise result in a forfeiture or reduction of such
insurance and each policy required under this Article shall have attached
thereto (i) an endorsement that such policy shall not be canceled or materially
changed without at least thirty (30) days' prior written notice to Landlord, and
(ii) an endorsement to the effect that the insurance as to the interest of
Landlord shall not be invalidated by any act or neglect of any person. All
policies of insurance shall be written in companies reasonably satisfactory to
Landlord and licensed in the state in which the Demised Premises are situated
and shall be written in such form and shall be distributed in such companies as
shall be reasonably acceptable by Landlord. Such policies shall be delivered to
Landlord endorsed "Premium Paid" by the company or agent issuing the same, or
accompanied by other evidence satisfactory to Landlord that the premiums thereon
have been paid. Such policies and evidence of payment shall be delivered to
Landlord prior to occupancy of the Demised Premises, or any portion thereof, by
Tenant, and upon expiration of such policy a new policy, plus evidence of
premium payment, shall be delivered to Landlord not less than ten (10) days
prior to the expiration of the then current policy term.
Subrogation. Notwithstanding the authority of the Tenant to name Tenant as a
named insured or an additional insured under the insurance policy or policies
required by this Article 7, Landlord agrees that the policies of insurance
required under this Article may contain a waiver of subrogation clause as to
Tenant. Provided that the aforesaid fire and extended coverage insurance is in
full force and effect and remains so, Landlord waives, releases and discharges
Tenant from all claims or demands whatsoever which Landlord may have or acquire
in the future arising out of damage to or destruction of the Demised Premises,
or any portion thereof, occasioned by fire or extended coverage risk, whether
such claim or demand may arise because of the negligence of Tenant, its agents
or employees or otherwise, and Landlord agrees to look to the insurance coverage
only in the event of such loss.
Personal Property. Tenant shall maintain insurance coverage upon all personal
property of Tenant and the personal property of others kept, stored or
maintained on the Demised Premises against loss or damage by fire, windstorm or
other casualties for such amount as Tenant may desire, and Tenant agrees that
such policies shall contain a waiver of subrogation clause as to Landlord.
Tenant hereby waives, releases and discharges Landlord from all claims or
demands whatsoever which Tenant may have or acquire in the future, arising out
of damage to or destruction of such contents occasioned by fire or by extended
coverage risk, whether such claim or demand may arise because of the negligence
of Landlord, its agents or employees or otherwise, and Tenant agrees to look to
the insurance coverage only in the event of such loss.
Expiration. Upon expiration of the Term of this Lease, the unearned premiums
upon any insurance policies or certificates thereof lodged with Landlord by
Tenant shall, subject to the provisions of 0 hereof, be payable to Tenant,
provided that Tenant shall not then be in default in keeping, observing or
performing the terms and conditions of this Lease.
Blanket Policies. Nothing in this Article shall prevent Tenant from taking out
insurance of the kind and in the amount provided for under the preceding
paragraphs of this Article under a blanket insurance policy or policies (copies
of which shall be delivered to Landlord) which may cover other properties owned
or operated by Tenant as well as the Demised Premises; provided, however, that
any such policy of blanket insurance of the kind provided for (i) shall specify
therein the amount required by the preceding provisions of this Article to be
carried or Tenant shall furnish Landlord and the holder of any fee mortgage with
a written statement from the insurers under such policies specifying the amount
of the total insurance allocated to the Demised Premises, and (ii) as respects
the Demised Premises, shall contain the various provisions required of such an
insurance policy by the foregoing provisions of this Article.
UTILITIES
Tenant Obligations. From and after the Completion Date Landlord will provide at
its cost to Tenant such electricity, gas, water, sewer and steam as required for
Tenant's operations on the Demised Premises and Tenant will pay to Landlord
Landlord's cost (billed to Tenant not more often than monthly in arrears) all
charges for such utilities. Tenant shall provide and pay for Tenant's
telecommunications service and other utility services not listed in the first
sentence of this section.
Future Water, Sewer or Road. In the event that any charge is made for present or
future water or sewer capacity or roads to serve the Demised Premises, or any
portion thereof, such charge shall be deemed to be a utility charge payable by
Tenant. If the period of time of the benefit conferred by such charge can be
reasonably determined and extends beyond the then current term of the Lease,
then Tenant shall pay a fraction of such utility charge based on the number of
complete calendar years remaining in the then current term compared to the
number of years of the benefit, not to exceed, however, thirty (30) years. In
the event Landlord has paid any such charge prior to the occupancy of the
Demised Premises, or any portion thereof, by Tenant, Tenant shall reimburse
Landlord for such utility charge based on the number of complete calendar years
in the Initial Term compared to the number of years of the benefit, not to
exceed, however, thirty (30) years. Charges applicable to any Extension Term, if
previously paid by Landlord, shall be paid at the beginning of such Extension
Term.
REPAIRS
Tenant Obligations. Except for the Guarantee and the completion of Incomplete
Items, Tenant, at Tenant's sole cost and expense, from and after the date of
taking possession of the Demised Premises and throughout the Term of this Lease,
shall take good care of the Demised Premises, and all improvements erected
thereon, and shall keep the same in good order and condition, and make and
perform all necessary maintenance and repairs thereto, interior and exterior,
structural and nonstructural, ordinary and extraordinary, foreseen and
unforeseen, of every nature, kind and description. When used in this Article,
the term "repairs" shall include all necessary replacements, renewals,
alterations, additions and betterments. All repairs made by Tenant shall be at
least equal in quality to the original work. The necessity for or adequacy of
repairs shall be measured by the standards which are appropriate for buildings
of similar construction and class, provided that Tenant shall in any event make
all repairs necessary to avoid any structural damage or other damage or injury
to the Building or other improvements erected on the Demised Premises.
Grounds. Tenant shall keep and maintain all portions of the Demised Premises and
the parking areas, sidewalks, curbs, entrances, passageways and all areas
adjoining the same, in a clean and orderly condition, reasonably free of dirt,
rubbish, snow, ice and unlawful obstructions.
No Landlord Obligations. Landlord shall not be required to furnish any services
or facilities or to make any repairs or alterations in, about or to the Demised
Premises or any improvements erected thereon, except for the Guarantee and
completion of Incomplete Items. Tenant hereby assumes the full and sole
responsibility for the condition, operation, repair, replacement, maintenance
and management of the Demised Premises and all improvements erected thereon, and
Tenant hereby waives any rights created by any law now or hereafter in force to
make repairs to the Demised Premises or improvements thereon at Landlord's
expense.
No Waste. Tenant shall not do or suffer any waste or damage, disfigurement or
injury to the Demised Premises, or any improvements erected thereon, or to the
fixtures or equipment therein, or permit or suffer any overloading of the floors
or other use that would place an undue stress on any improvement or portion
thereof beyond that for which such improvement was designed.
COMPLIANCE WITH LAWS
Tenant Obligations. Except as otherwise provided herein or as covered by the
Guarantee, throughout that part of the Term of this Lease subsequent to the
Completion Date, Tenant, at Tenant's sole cost and expense, shall promptly
correct any violation and shall promptly comply with any and all present and
future laws, ordinances, orders, rules, regulations and requirements of all
federal, state and municipal governments and appropriate departments,
commissions, boards and officers thereof, and the orders, rules and regulations
of the Board of Fire Underwriters where the Demised Premises are situated, or
any other body hereafter constituted exercising similar functions, which may
affect or be applicable to the Demised Premises, or any part thereof, or the
sidewalks, curbs, passageways, alleys, or entrances, or to the use or manner of
use of the Demised Premises, or any part thereof, and whether the correction or
removal so necessitated shall have been foreseen or unforeseen, or whether or
not the same shall involve extraordinary construction or other disposition.
Tenant Assumption. Notwithstanding that it may be usual and customary for
Landlord to assume responsibility and performance of any or all of the
obligations set forth in this Article, and notwithstanding any order, rule or
regulation directed to Landlord to perform, Tenant hereby assumes such
obligations because, by nature of this Lease, the rents and income derived from
this Lease by Landlord are net rentals not to be diminished by any expense
incident to the ownership of the Demised Premises or any portion thereof.
Contest. Tenant shall have the right, after prior written notice to Landlord, to
contest by appropriate legal proceedings diligently conducted in good faith, in
the name of Tenant or Landlord, or both, without cost or expense to Landlord,
the validity or application of any law or ordinance referred to in the following
provisions of this Article, subject to the following:
If, by the terms of any such law or ordinance, compliance therewith pending the
prosecution of any such proceeding may legally be delayed without the incurrence
of any lien, charge or liability of any kind against the Demised Premises, or
any portion thereof, and without subjecting Landlord to any liability, civil or
criminal, for failure so to comply therewith, Tenant may delay compliance
therewith until the final determination of such proceeding.
If any lien, charge or civil liability would be incurred by reason of any such
delay, Tenant nevertheless, on the prior written consent of Landlord, may
contest as aforesaid and delay as aforesaid, provided that such delay would not
subject Landlord to criminal liability and Tenant (i) furnishes Landlord
security, reasonably satisfactory to Landlord, against any loss or injury by
reason of any such contest or delay, and (ii) prosecutes the contest with due
diligence and in good faith. For such security Tenant shall deposit cash or cash
equivalents with Landlord or provide Landlord a letter of credit payable to
Landlord from a financial institution acceptable to Landlord and in form and
content acceptable to Landlord.
Landlord shall, at Tenant's sole cost and expense, including any attorney's
fees, execute and deliver any appropriate papers or other documents which may be
necessary or proper to permit Tenant so to contest the validity or application
of any such law or ordinance.
MECHANIC'S LIENS AND OTHER LIENS
Tenant Obligations. Tenant shall not suffer or permit any mechanic's liens to be
filed against the Demised Premises, or any part or portion thereof, by reason of
work, labor, services or materials supplied or claimed to have been supplied to
Tenant, or anyone holding the Demised Premises, or any part thereof, through or
under Tenant. If any such mechanic's liens shall at any time be filed against
the Demised Premises, or any part or portion thereof, Tenant shall cause the
same to be discharged of record within sixty (60) days after the date of filing
the same. If Tenant shall fail to discharge such mechanic's lien or liens within
such period, then, in addition to any other right or remedy of Landlord,
Landlord may, but shall not be obligated to, discharge the same either by paying
the amount claimed to be due or by procuring the discharge of such lien by
deposit in Court or by giving security, or in such other manner as is, or may
be, prescribed by present or future law. Any amount paid by Landlord for any of
the aforesaid purposes, and all reasonable legal and other expenses of Landlord,
including reasonable attorney's fees, in or about procuring the discharge of
such lien or liens, with all necessary disbursements in connection therewith,
with interest thereon at the rate of twelve percent (12%) per annum from the
date of payment, shall be repaid by Tenant to Landlord on demand by Landlord,
and if unpaid may be treated as additional rent. Nothing herein contained shall
imply any consent or agreement on the part of Landlord to subject Landlord's
estate to liability under any mechanic's lien law.
Landlord Obligations. The provisions of Paragraph 0 shall not apply to
Landlord's obligations under 0 of this Lease and Landlord agrees to indemnify,
defend and hold harmless Tenant with respect to mechanic's liens accruing by
reason of Landlord's obligations under 0 hereof. Landlord agrees to discharge
such liens in the manner set forth in Paragraph 0 hereof.
No Landlord Consent. Nothing in this Lease contained shall be deemed or
construed in any way as constituting the consent or request of Landlord, express
or implied, by inference or otherwise, to any contractor, subcontractor, laborer
or materialman for the performance of any labor or the furnishing of any
materials for any specific improvement, alteration to, repair of the Demised
Premises, or any part or portion thereof, or for the demolition or replacement
of any improvement now on the Demised Premises or hereafter erected thereon.
No Liens. Tenant shall not create or permit to be created or to remain, and
shall promptly discharge, any other lien, encumbrance or charge or security
interest, or other interest which might be or become a lien, encumbrance or
charge upon the Demised Premises, or any part or portion thereof, or the income
therefrom, having any priority or preference over or ranking on a parity with
the estate, rights and interest of Landlord in the Demised Premises, or any part
or portion thereof, or the income therefrom (except as created by or through
Landlord including without limitation any mortgage liens created on the fee by
Landlord), and Tenant shall not suffer any other matter or thing whereby the
estate, right and interest of Landlord in the Demised Premises, or any part or
portion thereof, or the income therefrom might be impaired.
Contest. Tenant shall have the right to contest the validity or amount of any
mechanic's lien or any lien referred to in the foregoing provisions of this
Article, provided that Tenant deposit cash or cash equivalents with Landlord or
provide Landlord a letter of credit payable to Landlord from a financial
institution acceptable to Landlord and in form and content acceptable to
Landlord in an amount equal to one hundred fifty percent (150%) of the amount of
such alleged lien. Such letter of credit shall be issued by a National Bank or a
Federal Savings and Loan Association.
INTENT OF PARTIES
Triple Net Lease. It being the intention and purpose of the respective parties
hereto that this Lease shall be a "Triple Net Lease" and that all rentals shall
be paid to Landlord without diminution except as otherwise provided herein, the
parties agree that all cost or expense of whatever character or kind, general or
special, ordinary or extraordinary, foreseen or unforeseen, and of every kind
and nature whatsoever that may be necessary in or about the operation of the
Demised Premises, and all improvements erected thereon, and Tenant's authorized
use thereof during the entire term of this Lease, or any extension thereof,
shall be paid by Tenant except as otherwise provided for herein, and all
provisions of this Lease relating to Impositions, charges or other expenses are
to be construed in light of such intention and purpose that this Lease be a
"Triple Net Lease", and that, except as otherwise provided for herein, all
rentals shall be paid to Landlord without diminution, reduction or offset.
DEFAULTS OF TENANT
Events of Default. Any one or more of the following events shall be considered
an "Event of Default":
If default shall be made by Tenant, by operation of law or otherwise, under the
provisions hereof relating to assignment, sublease, mortgage or other transfer
of Tenant's interest in this Lease or in the Demised Premises;
If default shall be made in the due and punctual payment of any Base Rent or
additional rent payable under this Lease or in the payment of any obligation to
be paid by Tenant to Landlord, when and as the same shall become due and
payable, and such default shall continue for a period of ten (10) days after
written notice thereof given by Landlord to Tenant;
If default shall be made by Tenant in keeping, observing or performing any of
the terms contained in this Lease, other than those referred to in the foregoing
Subparagraphs (a) and (b) of this Paragraph, which default does not expose
Landlord to criminal liability, and such default shall continue for a period of
sixty (60) days after written notice thereof given by Landlord to Tenant, or in
the case of such a default or a contingency which cannot with due diligence and
in good faith be cured within sixty (60) days, Tenant fails to proceed promptly
and with due diligence and in good faith to cure the same and thereafter to
prosecute the curing of such default with due diligence and in good faith (it
being intended that in connection with a default which does not expose Landlord
to criminal liability, not susceptible of being cured with due diligence and in
good faith within sixty (60) days that the time of Tenant within which to cure
the same shall be extended for such period as may be necessary for the curing
thereof promptly with due diligence and in good faith);
If default shall be made by Tenant in keeping, observing or performing any of
the terms contained in this Lease, other than those referred to in the foregoing
Subparagraphs (a), (b) and (c) of this Paragraph, which default exposes Landlord
to criminal liability, and such default shall continue after written notice
thereof given by Landlord to Tenant, and Tenant fails to proceed timely and
promptly with all due diligence and in good faith to cure the same and
thereafter to prosecute the curing of such default with all due diligence (it
being intended that in connection with a default which exposes Landlord to
criminal liability that Tenant shall proceed immediately to cure or correct such
condition with continuity and with all due diligence and in good faith); or
If, (i) Tenant shall make an assignment for the benefit of creditors, (ii) a
voluntary petition be filed by Tenant under any law having for its purpose the
adjudication of Tenant a bankrupt, or Tenant be adjudged a bankrupt pursuant to
an involuntary petition in bankruptcy, (iii) a receiver be appointed for the
property of Tenant by reason of insolvency of Tenant, or (iv) any department of
the state or federal government, or any officer thereof duly authorized, shall
take possession of the business or property of Tenant by reason of the
insolvency of Tenant.
Termination. Landlord, at any time during the continuance of any Event of
Default, may give written notice to Tenant specifying such Event of Default or
Events of Default and stating that this Lease shall expire and terminate on the
date specified in such notice, which shall be at least fifteen (15) days after
the giving of such notice, and upon the date specified in such notice this Lease
and all rights of Tenant under this Lease, including all rights of extension
whether exercised or not, shall expire and terminate.
Surrender. Upon any expiration or termination of this Lease, Tenant shall quit
and peaceably surrender the Demised Premises, and all portions thereof, to
Landlord, and Landlord, upon or at any time after any such expiration or
termination, may, without further notice, enter upon and reenter the Demised
Premises, and all portions thereof, and repossess itself of, by force, summary
proceeding, ejectment or otherwise, and may dispossess Tenant and remove Tenant
and all other persons and property from the Demised Premises, and all portions
thereof, and may have, hold and enjoy the Demised Premises and the right to
receive all rental and other income of and from the same.
Reletting. At any time, or from time to time after expiration or termination,
Landlord may relet the Demised Premises, or any part thereof, in the name of
Landlord or otherwise, for such term or terms (which may be greater or less than
the period which would otherwise have constituted the balance of the term of
this Lease) and on such conditions (which may include concessions or free rent)
as Landlord, in its sole and absolute discretion, may determine and may collect
and receive the rents therefor. Landlord shall in no way be responsible or
liable for any failure to relet the Demised Premises, or any part thereof, or
for any failure to collect any rent due upon any such reletting.
Deficiency. No expiration or termination of this Lease shall relieve Tenant of
its liabilities and obligations under this Lease, and such liabilities and
obligations shall survive any expiration or termination. In the event of any
expiration or termination, whether or not the Demised Premises, or any part
thereof, shall have been relet, Tenant shall pay to Landlord a sum equal to the
Base Rent, all Impositions, insurance premiums, and other expenses and charges
to be paid by Tenant hereunder up to the time of such expiration or termination
of this Lease, and thereafter Tenant, until the end of what would have been the
term of this Lease in the absence of such expiration or termination, shall be
liable to Landlord for, and shall pay to Landlord, as and for liquidated and
agreed current damages for Tenant's default (hereinafter called "Deficiency") to
Landlord monthly on the days on which the Base Rent would have been payable
under this Lease if this Lease were still in effect, and Landlord shall be
entitled to recover from Tenant each monthly Deficiency as the same shall arise.
The equivalent of the amount of the Base Rent, Impositions, insurance premiums,
and other expenses and charges to be paid by Tenant hereunder, which would be
payable under this Lease by Tenant if this Lease were still in effect, less
The net proceeds of any reletting effected pursuant to the provisions of
Paragraph 0 hereof after deducting all of Landlord's expenses in connection with
such reletting, including, without limitation, all repossession costs, brokerage
commissions, legal expenses, reasonable attorney's fees, alteration costs, and
expenses of preparation of the Demised Premises, or any portion thereof, for
such reletting.
Acceleration. At any time after any such expiration or termination, whether or
not Landlord shall have collected any monthly Deficiencies, as set forth in
▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇ shall be entitled to recover from Tenant, and Tenant shall
pay to Landlord, on demand, as and for liquidated and agreed final damages for
Tenant's default, an amount equal to the difference between the then present
worth of the aggregate of the Base Rent, Impositions, insurance premiums, and
other expenses and charges to be paid by Tenant hereunder for the unexpired
portion of the Term of this Lease, and the present worth of the aggregate fair
and reasonable rental value of the Demised Premises for the same period. In the
computation of present worth, a discount at the rate of four percent (4%) per
annum shall be employed. If the Demised Premises, or any part thereof, be relet
by Landlord for the unexpired term of this Lease, or any part thereof, before
presentation of proof of such liquidated damages to any Court, commission or
tribunal, the amount of rent reserved upon such reletting shall, prima facie, be
the fair and reasonable rental value for the part or the whole of the Demised
Premises so relet during the term of the reletting. Nothing herein contained
shall limit or prejudice the right of Landlord to prove for and obtain, as
liquidated damages by reason of expiration or termination, an amount equal to
the maximum allowed by any statute or rule of law in effect at the time when,
and governing the proceedings in which, such damages are to be proved, whether
or not such amount be greater, equal to or less than the amount of the
difference referred to above.
Other Remedies. In the event of any breach or threatened breach by Tenant of any
of the terms contained in this Lease, Landlord shall be entitled to enjoin such
breach or threatened breach and shall have the right to invoke any right or
remedy allowed at law or in equity or by statute or otherwise as though entry,
reentry, summary proceedings and other remedies were not provided for in this
Lease. Each remedy or right of Landlord provided for in this Lease shall be
cumulative and shall be in addition to every other right or remedy provided for
in this Lease, or now or hereafter existing at law or in equity or by statute or
otherwise, and the exercise or the beginning of the exercise by Landlord of any
one or more of such rights or remedies shall not preclude the simultaneous or
later exercise by Landlord of any or all other rights or remedies.
Payments by Landlord. If Tenant shall at any time fail to make any payment or
perform any other act on its part to be made or performed, then Landlord, after
ten (10) days' prior written notice to Tenant (or without notice in case of
emergency), and without waiving or releasing Tenant from any obligation of
Tenant contained in this Lease, may, but shall be under no obligation to do so,
make any payment or perform any other act on Tenant's part to be paid or
performed as in this Lease provided, and Landlord may enter upon the Demised
Premises for any such purpose and take all such action therein or thereon as may
be necessary therefor. Nothing herein contained shall be deemed as a waiver or
release of Tenant from any obligation of Tenant in this Lease contained. All
sums so paid by Landlord and all costs and expenses, including reasonable
attorney's fees, incurred by Landlord in connection with the performance of any
such act, together with interest thereon at the rate of twelve percent (12%) per
annum from the date of making such expenditure by Landlord, shall be deemed
additional rent hereunder and, except as is otherwise expressly provided herein,
shall be payable to Landlord on demand or, at the option of Landlord, may be
added to any monthly rental then due or thereafter becoming due under this
Lease, and Tenant covenants to pay any such sum or sums, with interest as
aforesaid, and Landlord shall have, in addition to any other right or remedy of
Landlord, the same rights and remedies in the event of nonpayment thereof by
Tenant as in the case of default by Tenant in the payment of monthly rental.
No Waiver. No failure by Landlord or by Tenant to insist upon the performance of
any of the terms of this Lease or to exercise any right or remedy consequent
upon a breach thereof, and no acceptance by Landlord of full or partial rent
during the continuance of any such breach, shall constitute a waiver of any such
breach or of any of the terms of this Lease. None of the terms of this Lease to
be kept, observed or performed by Landlord or by Tenant, and no breach thereof,
shall be waived, altered or modified except by a written instrument executed by
Landlord and/or by Tenant, as the case may be. No waiver of any breach shall
affect or alter this Lease, but each of the terms of this Lease shall continue
in full force and effect with respect to any other then existing or subsequent
breach of this Lease. No waiver of any default of Landlord or Tenant herein
shall be implied from any omission by the other to take any action on account of
such default, if such default persists or is repeated, and no express waiver
shall affect any default other than the default specified in the express waiver
and that only for the time and to the extent therein stated. One or more waivers
by Landlord or Tenant shall not be construed as a waiver of a subsequent breach
of the same covenant, term or condition.
DESTRUCTION AND RESTORATION
Prompt Work. Tenant covenants and agrees that in case of damage to or
destruction of the Building after the Completion Date, or the machinery,
fixtures and equipment therein contained (exclusive of Tenant's personal
property and trade fixtures), by fire or otherwise after the Completion Date,
Tenant will promptly, at its sole cost and expense, repair, restore and rebuild
the same as nearly as possible to the condition that the same were in
immediately prior to such damage or destruction, or with such Changes or
Alterations as may be made in conformity with 0 hereof. Except as provided in
paragraph 14.3 hereof, proceeds of insurance policies providing coverage for
such damage or destruction may be used by Tenant for such repair, restoration or
rebuilding. The provisions and conditions in 0 herein contained applicable to
Changes or Alterations shall similarly apply to work required to be done under
this Article. If the net amount of insurance proceeds is insufficient to
restore, repair and rebuild the Building, machinery, fixtures and equipment
therein contained (exclusive of Tenant's personal property and trade fixtures)
Tenant will upon the written request of Landlord deposit with Landlord a cash
deposit equal to the reasonable estimate of the amount necessary to restore,
repair and rebuild the same, less the amount of such insurance proceeds
available.
Effect on Lease. Tenant's obligation to make payment of the Base Rent and all
Impositions, insurance premiums and other expenses and charges on the part of
Tenant to be paid, and the obligation of Tenant to perform all other covenants
and agreements on the part of Tenant to be performed and contained herein, shall
not be affected by any such damage to or destruction of the Building or the
Demised Premises by fire or otherwise, and Tenant waives any right now or
hereafter conferred upon Tenant by statute or otherwise to quit or surrender
this Lease or the Demised Premises, or any part thereof, or to any suspension,
diminution, abatement or reduction of rent on account of any such damage or
destruction.
Payment to Mortgagee. To the extent that any insurance monies which would
otherwise be payable to Landlord and used in the restoration of a damaged or
destroyed building is paid to any mortgagee of Landlord or otherwise applied for
Landlord's benefit except by Tenant as described in Section 14.1 above, Landlord
shall make available for the use of Tenant in connection with the repairing,
restoring and rebuilding of any damaged or destroyed building on the Demised
Premises an amount equal to the amount so paid.
Builders Risk. The provisions of this Article shall apply only to damage or
destruction of a building or other improvements erected on the Demised Premises
and ready for beneficial occupancy by Tenant after the Completion Date. Any such
damage or destruction occurring to a building or other improvements being
constructed pursuant to the provisions of this Lease which occurs prior to the
Completion Date shall be repaired, replaced or rebuilt by Landlord and Landlord
shall maintain builders risk insurance in an amount equal to one hundred percent
(100%) of the replacement value of the Work completed and the materials stored
at the site of the Work during construction of the building or other
improvements and all insurance monies received by Landlord under its builders
risk insurance policies shall be applied by Landlord to, and Landlord shall,
restore, repair or rebuild the damaged or destroyed building or other
improvements.
End of Term. In the event that a building or other improvements erected on the
Demised Premises are damaged or destroyed such that Tenant is unable to use or
occupy the Demised Premises during any part of the last year of the Term of this
Lease, and such inability to use or occupy materially adversely affects Tenant's
use or occupancy of the Demised Premises, and provided Tenant has in full force
and effect at the time of such damage or destruction the insurance policies of
the kind and in the amount required by this Lease, Tenant may elect to terminate
this Lease without obligation to restore or rebuild as of the date of such
damage or destruction by giving Landlord an appropriate written notice to that
effect within sixty (60) days after such damage or destruction. In the event
Tenant elects to terminate this Lease, as set forth in this Paragraph, Landlord
shall be entitled to receive and retain as its sole property, free and clear of
any claim of Tenant, the full amount of the proceeds of the insurance on the
damaged or destroyed buildings or other improvements. All rent or other charges
paid or payable shall be adjusted as of the date of the damage or destruction
and an appropriate payment or refund shall be made as the case may be.
Contractor. Any contractor hired by Tenant to perform the work described in this
Article must be approved by Landlord, which approval will not be unreasonably
withheld or delayed.
CONDEMNATION
Entire Taking. If, during the Term of this Lease, all or any part of the Demised
Premises shall be taken as the result of the exercise of the power of eminent
domain, and such taking materially adversely affects Tenant's use or occupancy
of the Demised Premises, (hereinafter referred to as the "Proceedings"), at
Tenant's option by notice given to Landlord within sixty (60) days after such
taking this Lease and all right, title and interest of Tenant hereunder shall
cease and come to an end on the date of vesting of title pursuant to such
Proceedings and Landlord shall be entitled to and shall receive the award made
in such Proceedings, Tenant hereby assigning any interest in such award to
Landlord; provided, however, Tenant shall be entitled to any award for its
economic loss as a result of such taking and as otherwise provided in Section
15.2 hereof.
Award. In any taking of the Demised Premises, or any part thereof, whether or
not this Lease is terminated as in this Article provided, Tenant shall not be
entitled to any portion of the award for the taking of the land or damage to the
Building (except as otherwise provided for in Paragraph 14.3 with respect to the
restoration of such building or buildings if Tenant does not terminate this
Lease in which event said award shall be treated as insurance proceeds and
Landlord shall pay for any required repair or reconstruction costs of the
Demised Premises or improvements thereon including without limitation the
Building and the Railroad Spur) or for the state or interest of Tenant therein,
all such award being hereby assigned to Landlord, except that Tenant shall have,
nevertheless, the right to prove in the Proceedings and to receive any award
which may be made for its economic loss as a result of such taking and for
damages to or condemnation of Tenant's moveable trade fixtures and equipment, or
for such other damage as Tenant may be allowed under present or future law for
items other than (except as provided herein) the land or Building.
Payment of Rent. In the event of the termination of this Lease as a result of
any such Proceedings, Tenant shall pay to Landlord all Base Rent and all other
charges payable by Tenant, justly apportioned to the date of such termination.
Contractor. Any contractor hired by Tenant to perform the work described in this
Article must be approved by Landlord, which approval will not be unreasonably
withheld or delayed.
ASSIGNMENT AND SUBLETTING
Consent Required. Tenant shall not assign this Lease, either in whole or in
part, nor sublet any portion of the Demised Premises, nor mortgage the leasehold
interest of Tenant or any interest therein, without first obtaining, in each and
every instance, Landlord's consent thereto in writing, which consent shall be at
Landlord's sole and absolute discretion. No permitted assignment or subleasing
shall relieve Tenant of Tenant's obligations in this Lease contained, nor shall
any assignment or transfer of this Lease be effective until there shall have
been delivered to Landlord a document in recordable form, executed by Tenant and
the proposed assignee, wherein and whereby such assignee assumes for the benefit
of Landlord due performance of the obligations of Tenant in respect of the
payments to be made by Tenant and the obligations to be performed by Tenant
under the terms of this Lease to the end of the Term hereof. Tenant agrees to
pay on behalf of Landlord any and all costs of Landlord, including reasonable
attorney's fees, occasioned by such assignment or sublease.
Recapture Excess. If Landlord consents to an assignment of this Lease or
consents to a sublease of all or part of the Demised Premises, and under such
assignment or sublease Tenant receives payment in excess of the Base Rent and
Additional Rent due and payable by Tenant under this Lease for the Demised
Premises or part of the Demised Premises, as the case may be, then Tenant shall
pay to Landlord as additional rent fifty percent (50%) of all such excess within
ten (10) days of Tenant's receipt of such excess.
SUBORDINATION
Subordination. This Lease shall be subject and subordinate to the lien of any
mortgage or mortgages which at any time may be placed upon the Demised Premises,
or any portion thereof, by Landlord, and to replacements, renewals and
extensions thereof. Tenant agrees at any time hereafter, and from time to time,
on demand, to execute and deliver any instruments, releases or other documents
that may be reasonably required for the purpose of subjecting and subordinating
this Lease as above provided, to the lien of any such mortgage or mortgages. It
is agreed, nevertheless, that so long as Tenant be not in default in the payment
of Base Rent, Impositions, insurance premiums and other expenses and charges to
be paid by Tenant under this Lease, or in the performance of all covenants,
agreements and conditions to be performed by Tenant under this Lease, that such
subordination agreement or other instrument, release or document shall not
interfere with, hinder or molest Tenant's right to quiet enjoyment under this
Lease nor the right of Tenant to continue to occupy the Demised Premises and all
portions thereof and to conduct its business thereon in accordance with the
terms of this Lease. In the event of transfer of Landlord's interest herein,
voluntary or involuntary, or in the event any mortgagee shall succeed to the
interest of Landlord in the Demised Premises, through foreclosure or otherwise,
at the request of the transferee or former mortgagee, Tenant shall enter into an
agreement attorning to the transferee or former mortgagee, their successors and
assigns, upon all obligations of this Lease, provided the transferee or former
mortgagee assumes in writing all obligations of Landlord under this Lease from
and after the date of the transfer or succession to interest, as the case may
be.
SIGNS
Signs Allowed. Tenant may erect such signs on the exterior or interior of the
Building as Tenant may deem desirable so long as such signs (i) do not exceed in
weight the safe carrying capacity of the structure, (ii) do not violate the
laws, rules or regulations of the municipality in which the Demised Premises are
situated, as well as the laws, rules and regulations of the state and federal
governments, and (iii) are compatible with the architecture of the Building and
the landscaping of the Demised Premises.
CHANGES AND ALTERATIONS
Tenant Obligations. Tenant shall have the right at any time, and from time to
time during the Term of this Lease, to make such changes and alterations,
structural or otherwise, to the Building, improvements and fixtures hereafter
erected on the Demised Premises as Tenant shall deem necessary or desirable in
connection with the requirements of its business, which such changes and
alterations (other than changes or alterations of Tenant's moveable trade
fixtures and equipment) shall be made in all cases subject to the following
conditions, which Tenant covenants to observe and perform:
No change or alteration shall be undertaken until Tenant shall have procured and
paid for, so far as the same may be required, from time to time, all municipal,
state and federal permits and authorizations of the various governmental bodies
and departments having jurisdiction thereof, and Landlord agrees to join in the
application for such permits or authorizations whenever such action is
necessary, all at Tenant's sole cost and expense.
Before commencement of any change or alteration, Tenant shall:
obtain Landlord's prior written consent, which shall not be withheld if the
change or alteration would not in the reasonable opinion of Landlord impair
the value or usefulness of the Building, or any substantial part thereof;
obtain Landlord's prior written approval of a licensed architect or a
licensed professional engineer selected and paid for by Tenant, who shall
supervise any such Work (hereinafter referred to as "Alterations Architect
or Engineer");
obtain Landlord's prior written approval of detailed plans and
specifications prepared and approved in writing by the Alterations
Architect or Engineer, and of each amendment and change thereto;
obtain Landlord's prior written approval of a licensed contractor selected
and paid for by Tenant who shall perform such work; and
furnish to Landlord a surety company performance bond issued by a surety
company licensed to do business in the state in which the Demised Premises
are located, and reasonably acceptable to Landlord in an amount at least
equal to the estimated cost of such work guaranteeing the completion
thereof within a reasonable time thereafter, free and clear of all liens,
encumbrances, security interests and other charges, and in accordance with
plans and specifications approved by Landlord.
Any change or alteration shall, when completed, be of such a character as
not to reduce the value and utility of the Demised Premises or the Building
to which such change or alteration is made below its value and utility
immediately before such change or alteration, nor change the character of
the Building as to use without Landlord's express written consent.
All work done in connection with any change or alteration shall be done
promptly and in a good and workmanlike manner and in compliance with all
building and zoning laws of the place in which the Demised Premises are
situated, and with all laws, ordinances, order, rules, regulations and
requirements of all federal, state and municipal governments and
appropriate departments, commissions, boards and officers thereof, and in
accordance with the orders, rules and regulations of the Board of Fire
Underwriters where the Demised Premises are situated, or any other body
exercising similar functions. The cost of any such change or alteration
shall be paid in cash so that the Demised Premises and all portions thereof
shall at all times be free of liens for labor and materials supplied to the
Demised Premises, or any portion thereof. The work of any change or
alteration shall be prosecuted with reasonable dispatch, delays due to
strikes, lockouts, acts of God, inability to obtain labor or materials,
governmental restrictions or similar causes beyond the control of Tenant
excepted.
All improvements and alterations (other than Tenant's moveable trade
fixtures and equipment) made or installed by Tenant shall immediately, upon
completion or installation thereof, become the property of Landlord without
payment therefor by Landlord, and shall be surrendered to Landlord on
expiration of the Term or sooner termination of this Lease.
INDEMNIFICATION
Indemnification by Tenant. Tenant agrees to indemnify and save Landlord harmless
against and from any and all claims by or on behalf of any person, entity or
governmental agency, and all costs, attorney's fees, expert fees, expenses and
liabilities incurred from any such claim or action or proceeding brought
thereon:
arising from the conduct or management or from any work or thing whatsoever
done in or upon the Demised Premises subsequent to the Completion Date,
including any work or thing resulting in environmental contamination of the
Demised Premises, arising during the Term of this Lease (except to the
extent caused by act or negligence of Landlord, its agents, invitees,
contractors, servants, employees or licensees); or
arising from any breach or default on the part of Tenant in the performance
of any covenant or agreement on the part of Tenant to be performed,
pursuant to the terms of this Lease; or
arising from any accident, injury or damage whatsoever caused to any person
or entity occurring during that part of the Term of this Lease subsequent
to the Completion Date in or upon the Demised Premises (except to the
extent caused by act or negligence of Landlord, its agents, invitees,
contractors, servants, employees or licensees); or
arising from any act or negligence of Tenant, its agents, contractors,
servants, employees or licensees; and
in case any action or proceeding be brought against Landlord by reason of
any such claim, Tenant, upon timely notice from Landlord, covenants to
defend such action or proceeding by counsel reasonably satisfactory to
Landlord. Tenant's obligations under this Article shall be insured by
contractual liability endorsement on Tenant's policies of insurance
required under this Lease if such endorsement is available.
Indemnification by Landlord. Landlord agrees to indemnify and save Tenant
harmless against and from any and all claims by or on behalf of any person,
entity or governmental agency, and all costs, attorney's fees, expert fees,
expenses and liabilities incurred from any such claim or action or proceeding
brought thereon:
arising from the conduct or management or from any work or thing whatsoever
done in or upon the Demised Premises, including any work or thing resulting
in environmental contamination of the Demised Premises, arising prior to
the Completion Date (except to the extent caused by act or negligence of
Tenant, its agents, invitees, contractors, servants, employees or
licensees); or
arising from any breach or default on the part of Landlord in the
performance of any covenant or agreement on the part of Landlord to be
performed, pursuant to the terms of this Lease; or
arising from any accident, injury or damage whatsoever caused to any person
or entity occurring prior to that part of the Term of this Lease prior to
the Completion Date in or upon the Demised Premises (except to the extent
caused by act or negligence of Tenant, its agents, invitees, contractors,
servants, employees or licensees); or
arising from any act or negligence of Landlord, its agents, contractors,
servants, employees or licensees; and
in case any action or proceeding be brought against Tenant by reason of any
such claim, Landlord, upon timely notice from Tenant, covenants to defend
such action or proceeding by counsel reasonably satisfactory to Tenant.
MISCELLANEOUS
Entry by Landlord. Tenant agrees to permit Landlord and the authorized
representatives of Landlord to enter upon the Demised Premises at all reasonable
times during ordinary business hours for the purpose of inspecting the same and
making any necessary repairs to comply with any laws, ordinances, rules,
regulations or requirements of any public body. Nothing herein contained shall
imply any duty upon the part of Landlord to do any such work which, under any
provision of this Lease, Tenant may be required to perform and the performance
thereof by Landlord shall not constitute a waiver of Tenant's default in failing
to perform the same. Landlord may, during the progress of any work, keep and
store upon the Demised Premises all necessary materials, tools and equipment.
Landlord shall not in any event be liable for inconvenience, annoyance,
disturbance, loss of business or other damage to Tenant by reason of making
repairs or the performance of any work in or about the Demised Premises, or on
account of bringing material, supplies and equipment into, upon or through the
Demised Premises during the course thereof, and the obligations of Tenant under
this Lease shall not be thereby affected in any manner whatsoever.
Sale Signs. Landlord is hereby given the right during usual business hours at
any time during the Term of this Lease, to enter upon the Demised Premises and
to exhibit the same for the purpose of sale. During the final one (1) year of
the Term, Landlord shall be entitled to display on the Demised Premises, in such
manner as to not unreasonably interfere with Tenant's business, signs indicating
that the Demised Premises are for rent or sale and suitably identifying
Landlord.
Notice. All notices, demands and requests which may be or are required to be
given by either party to the other shall be in writing, sent by United States
registered or certified mail, postage prepaid, by messenger service, or by
hand-delivery. All notices, demands and requests by Landlord to Tenant shall be
addressed to Tenant at the Demised Premises, or at such other place as Tenant
may from time to time designate by written notice to Landlord. All notices,
demands and requests by Tenant to Landlord shall be addressed to Landlord at the
same address for the paying of rent hereunder or at such other place as Landlord
may from time to time designate by written notice to Tenant. Notices, demands
and requests which shall be served upon Landlord by Tenant, or upon Tenant by
Landlord, in the manner aforesaid, shall be deemed to be sufficiently served or
given for all purposes hereunder at the time such notice, demand or request
shall be received, or when receipt therefor is refused.
Surrender of Premises. Tenant shall upon termination of this Lease for any
reason whatsoever surrender to Landlord the Demised Premises, together with all
buildings, structures, fixtures and building equipment or real estate fixtures
upon the Demised Premises, together with all additions, alterations and
replacements thereof (except Tenant's moveable trade fixtures and equipment and
other property which shall be removed by Tenant within ninety (90) days after
such termination and Landlord shall allow Tenant reasonable access to the
Demised Premises for such purpose) in good order, condition and repair, except
for reasonable wear and tear, and except as is otherwise provided for in this
Lease. At Tenant's cost, Tenant shall provide Landlord with a Phase One
environmental report on the Demised Premises within ninety (90) days after the
expiration of the Term or earlier termination of this Lease if Tenant does not
exercise its Purchase Option as provided in Article 22 hereof.
Quiet Enjoyment. Landlord covenants and agrees that Tenant, upon paying the Base
Rent, and other expenses and charges herein provided for, and observing and
keeping the covenants, agreements and conditions of this Lease on its part to be
kept, observed and performed, shall lawfully and quietly hold, occupy and enjoy
the Demised Premises and the exclusive possession thereof during the term of
this Lease without hindrance or molestation by Landlord or by any person or
persons claiming under Landlord.
Landlord. The term "Landlord", as used in this Lease so far as covenants or
obligations on the part of Landlord are concerned, shall be limited to mean and
include only the owner or owners at the time in question of the fee of the
Demised Premises, and in the event of any transfer or transfers or conveyance
the then grantor shall be automatically freed and relieved from and after the
date of such transfer or conveyance of all personal liability as respects the
performance of any covenants or obligations on the part of Landlord contained in
this Lease thereafter to be performed, provided that any funds in the hands of
such landlord or the then grantor at the time of such transfer, in which Tenant
has an interest, shall be turned over to the grantee, and any amount then due
and payable to Tenant by Landlord or the then grantor under any provision of
this Lease shall be paid to Tenant, it being intended hereby that the covenants
and obligations contained in this Lease on the part of Landlord shall, subject
to the aforesaid, be binding on Landlord, its successors and assigns, only
during and in respect of their respective successive periods of ownership.
Estoppel Certificates. The parties hereto agree at any time, and from time to
time upon not less than ten (10) days' prior written request by either party, to
execute, acknowledge and deliver to the other party a statement, in writing,
certifying that this Lease is unmodified and in full force and effect (or if
there have been modifications that this Lease is in full force and effect as
modified, and stating the modifications) and the dates to which the Base Rent,
and other expenses and charges have been paid in advance, if any, and such other
statements or certifications as Landlord or Tenant may reasonably request. It is
the intention of the parties hereto that any statement delivered pursuant to
this Paragraph may be relied upon by any prospective purchaser, mortgagee or
other party dealing with the Demised Premises or with Landlord or Tenant.
Due Authority. Landlord and Tenant represent and warrant to each other:
Landlord and Tenant each is duly organized and existing and in good
standing under the laws of their state of incorporation and have corporate
power to own and operate their property and to carry on their business.
Landlord and Tenant each is duly qualified to do business and is in good
standing in the state in which the Demised Premises are located.
This Lease has been duly authorized by all necessary corporate action, has
been duly executed and delivered and is the valid and binding obligation of
Landlord or Tenant, enforceable in accordance with its terms.
Memorandum of Lease. Upon not less than ten (10) days' prior written
request by either party, the parties hereto agree to execute and deliver to
each other a Memorandum of Lease, in recordable form, which may be recorded
by either party, at that party's expense, setting forth the following:
The date of this Lease;
The parties to this Lease;
The term of this Lease;
The legal description of the Demised Premises;
The legal descriptions of Landlord's Property (defined below) and the
Eastern Portion (defined below);
Tenant's right to purchase the Demised Premises (defined below); and
Tenant's easement rights across Landlord's Property (defined below) and the
Eastern Portion (defined below).
Severability. If any term or provision of this Lease shall, to any extent,
be held invalid or unenforceable, the remaining terms and provisions of
this Lease shall not be affected thereby, but each term and provision of
this Lease shall be valid and in force to the fullest extent permitted by
law.
Governing Law. This Lease shall be construed and be enforceable in
accordance with the laws of the state in which the Demised Premises are
located.
Captions. The captions of this Lease are for convenience and reference
only, and in no way define, limit or describe the scope or intent of this
Lease, nor in any way affect this Lease.
Relation. This Lease does not create the relationship of principal and
agent or of partnership or of joint venture, or of any association between
Landlord and Tenant, the sole relationship between Landlord and Tenant
under this Lease being that of landlord and tenant.
Entire Agreement; Modification. All preliminary and contemporaneous
negotiations are merged into and incorporated into this Lease. This Lease
contains the entire agreement between the parties with regard to leasing
the Demised Premises and shall not be modified or amended in any manner
except by an instrument in writing executed by the parties hereto.
Binding Effect. The covenants and agreements herein contained shall bind
and inure to the benefit of Landlord, its successors and assigns, and
Tenant and its successors and permitted assigns.
Access to Demised Premises. Landlord owns property adjacent to the east of
the Demised Premises, as described in Exhibit A hereto (the "Eastern
Portion"). Landlord leases property adjacent to the south of the Demised
Premises from Arkansas Development Finance Authority ("ADFA") as described
on Exhibit D-1 hereto, and Landlord owns property adjacent to the property
owned by ADFA as described on Exhibit D-2 hereto (the real property
described on Exhibits D-1 and D-2 together, "Landlord's Property").
Landlord hereby grants Tenant a sixty (60) feet wide easement across and
through the Eastern Portion, from the road on the eastern boundary of the
Eastern Portion to the Demised Premises, to allow Tenant and Tenant's
invitees, customers, employees, agents, contractors, licensees, and others
associated with Tenant reasonable access across and through the Eastern
Portion to and from the Demised Premises, the location of such easement to
be determined from time to time by Landlord. Furthermore, subject to the
approval of ADFA:
Landlord shall allow Tenant and Tenant's invitees, customers, employees,
agents, contractors, licensees, and others associated with Tenant
reasonable access across and through Landlord's Property to and from the
Demised Premises.
In the event Tenant exercises the Purchase Option described in Article 22
hereof, Tenant shall have an easement across and through Landlord's
Property for such access across and through Landlord's Property to the
Demised Premises, without additional charge or expense except the cost, if
any, of a survey to describe the location of the easement.
Landlord and Tenant shall attempt in good faith to determine a location for
the easement across and through Landlord's Property and, if unable to so
determine, shall jointly seek a declaratory judgment in a court of
competent jurisdiction to establish the easement based upon the minimum
easement area necessary for such access.
The easement across and through Landlord's Property shall be in addition
to, and not in the place of, the easement across and through the Eastern
Portion.
Tenant agrees to and does indemnify, defend and hold Landlord and ADFA harmless
from any and all claims, demands, liabilities, damages and costs, including
attorneys' fees, arising out of or resulting from any access across and through
Landlord's Property.
Railroad Spur.
Prior to the Completion Date, Landlord shall construct a straight railroad spur
track and a curved railroad spur track (the "Straight Track" and the "Curved
Track", respectively; together, the "Railroad Spur") on the eastern boundary of
the Demised Premises, as shown on Exhibit A.
Landlord shall allow Tenant and Tenant's invitees, customers, employees, agents,
contractors, licensees, and others associated with Tenant, and railroad cars
serving the Demised Premises, reasonable use of the Railroad Spur and access
across, through and over the Railroad Spur to and from the Demised Premises,
without additional charge or expense.
If Tenant exercises the Purchase Option as described in Article 22 hereof,
Tenant shall also own the Curved Track. Tenant shall then allow Landlord and
Landlord's invitees, customers, employees, agents, contractors, licensees, and
others associated with Landlord, and railroad cars serving the Eastern Portion,
reasonable use of the Curved Track and access across, through and over the
Curved Track to and from the Eastern Portion, without additional charge or
expense. The Straight Track shall remain Landlord's property and Tenant shall
continue to have use of the Straight Track as described in subparagraph (b)
above.
Subject to the approval of ADFA, during the Term of this Lease and thereafter if
Tenant purchases the Demised Premises, railroad cars serving the Demised
Premises shall be allowed reasonable ingress and egress across Landlord's
Property to the Railroad Spur without additional charge or expense.
Tenant agrees to and does indemnify, defend and hold Landlord and ADFA harmless
from any and all claims, demands, liabilities, damages and costs, including
attorneys' fees, arising out of or resulting from Tenant's use of the Railroad
Spur or ingress or egress to the Railroad Spur across Landlord's Property.
Environmental Matters. Landlord shall deliver to Tenant within sixty (60) days
after the date of this Lease a Phase One environmental audit of the Demised
Premises certifying the Demised Premises to be free from hazardous materials as
defined by any law, statute, ordinance, rule, or regulation of any governmental
unit or agency ("Hazardous Materials"). Landlord shall deliver an appropriate
certificate acceptable to Tenant at the Completion Date certifying the Building
and improvements made by Landlord on the Demised Premises in connection with the
Building and the Railroad Spur to be free from Hazardous Materials as of the
Completion Date. Landlord shall indemnify, defend, and hold Tenant harmless from
all loss, liability, claims, damages, suits and demands associated with or
arising from any Hazardous Materials on the Demised Premises brought on to the
Demised Premises by Landlord or its invitees, licensees, agents, employees,
officers or customers. Tenant shall indemnify, defend, and hold Landlord
harmless from all loss, liability, claims, damages, suits and demands associated
with or arising from any Hazardous Materials on the Demised Premises brought on
to the Demised Premises by Tenant or its invitees, licensees, agents, employees,
officers or customers, or by anyone else, known or unknown, except Landlord or
its invitees, licensees, agents, employees, officers or customers.
Landlord Lien.
To secure payment of sums agreed to be paid by Tenant to Landlord (collectively,
the "Obligations"), Landlord, pursuant to the laws of the State of Arkansas, has
a lien ("Statutory Lien") upon any property placed by Tenant on the Demised
Premises. The Statutory Lien and any other lien Landlord shall have on such
property (collectively, "Landlord's Liens") shall (i) to the extent the
Landlord's Liens secure Obligations up to a total of $50,000 (the "Initial
Obligations") be first and prior liens upon such property (except for a purchase
money lien on specific property which shall be a first and prior lien to the
Landlord's Liens), and (ii) to the extent the Landlord's Liens secure the excess
over $50,000 of the Obligations (the "Excess Obligations") be subordinate and
inferior liens on such property as is at any time and from time to time (whether
prior to or subsequent to the attachment of Landlord's Liens to such property)
pledged by Tenant as collateral to a lender of Tenant ("Lender").
Landlord may enforce the Landlord's Liens in accordance with applicable law as a
non-exclusive remedy upon an Event of Default under this Lease.
To the extent the Landlord's Liens secure the Excess Obligations, they shall
automatically be subordinate to any lien on the same property that secures a
Lender, either as of the Effective Date or at any time during the Term of this
Lease. To the extent the Landlord's Liens secure the Initial Obligations, they
will not be subordinate to the lien of a Lender. Notwithstanding the automatic
subordination of the Landlord's Liens to the extent they secure the Excess
Obligations, if any Lender requests in writing to Landlord, Landlord will
provide a subordination agreement or other instrument reasonably acceptable to
Landlord and to the Lender subordinating any rights and interests which Landlord
might have in property placed by Tenant on the Demised Premises to the rights
and interests of the Lender in such property, except for the lien of Landlord's
Liens to the extent they secure the Initial Obligations.
PURCHASE OPTION
Purchase Option. At any time during the Term of this Lease, Tenant shall have
the right to purchase from Landlord all of the Demised Premises at a purchase
price and on the terms and conditions set forth in this Article ("Purchase
Option"). Tenant shall exercise such Purchase Option by delivery of written
notice to Landlord prior to the expiration of the Purchase Option ("Option
Notice").
Terms and Conditions.
Purchase Price. The purchase price payable by Tenant for the Demised Premises
shall be Fifty Thousand Dollars ($50,000) per acre, increased during each
Extension Term by the same percentage as the increase in Base Rent, plus the
actual, direct out-of-pocket cost to Landlord of the Building and the Railroad
Spur.
Date. The closing of the purchase shall take place at a time and date not less
than 60 days and not more than 120 days after the Option Notice and, in any
event, prior to the expiration of the Term of this Lease.
Place. Closing shall take place at a title company chosen by Tenant.
Conveyance. At Closing, Landlord shall convey to Tenant the Demised Premises.
Such conveyance shall be made by a special warranty deed ("Deed") and shall be
made free and clear of any lien or encumbrance except (i) this Lease (Landlord
shall at closing assign its interest in this Lease to Tenant), (ii) liens and
encumbrances caused, created, requested, permitted or consented to by Tenant,
(iii) liens and encumbrances made pursuant to the provisions of this Lease, (iv)
liens and encumbrances created as a result of a default by Tenant under this
Lease, (v) any Impositions, (vi) any condemnation proceeding or taking by
governmental authority, and (vii) any lien or encumbrance encumbering the
Demised Premises as of the date of this Lease and shown as an exception on the
title policy attached hereto as Exhibit E. The foregoing exceptions shall not
include any mortgage obtained by Landlord. Moreover, Landlord covenants and
warrants that no additional liens or encumbrances will be added to the Demised
Premises during the Term without Tenant's prior written consent, which consent
will not be unreasonably withheld; provided, however, Tenant may condition such
consent on the release at or before Closing of any lien or encumbrance so
consented to by Tenant in the event the Purchase Option is exercised by Tenant
and, in the event of a consent so conditioned by Tenant, the lien or encumbrance
subject to such consent shall be removed by Landlord prior to Closing.
Title Policy and Objections to Title.
Tenant's obligation to close the purchase contemplated hereby is conditioned
upon the issuance of an owner's title insurance policy in the amount of the
Purchase Price consistent with the state of title described above.
To obtain such title policy, Tenant shall order a title commitment within five
(5) business days after the Option Notice.
Within five (5) business days after receiving the title commitment, Tenant shall
provide Landlord with written notice of any objections by Tenant to any matters
or conditions shown on the title commitment caused by Landlord (a "Landlord
Matter Objection") or not caused by Landlord (a "Non-Landlord Matter Objection")
(each, an "Objection"). No lien or encumbrance allowed at Closing under
subsection 22(d) above may be an Objection.
Landlord shall, at Landlord's sole cost and expense, remedy or remove all
Landlord Matter Objections within thirty (30) days after Landlord's receipt of
Tenant's notice of such Objections (the "Cure Period"). Landlord may, but shall
not be required to, at Landlord's sole cost and expense, remedy or remove all
Non-Landlord Matter Objections within the Cure Period. In no event shall Tenant
be required to pay any expense, cost or disbursement in connection with the
remedy or removal of any Objection except as approved in writing in advance by
Tenant.
In the event Landlord does not or is unable to cause the removal of any
Non-Landlord Matter Objection, Tenant may, on or before five (5) business days
after the Cure Period, terminate this Purchase Option by giving Landlord written
notice, whereupon this Purchase Option shall be terminated. If Tenant fails to
terminate within the five (5) business day period, it shall be presumed that
Tenant has waived the unremedied Non-Landlord Matter Objection and such shall
become a lien or encumbrance permitted or consented to by Tenant, as provided in
Section 22.2(d)(ii), above.
Tenant shall pay for such title commitment and policy.
Breach and Remedies. In the event of a breach by Landlord of its obligations
under this Article 22, Tenant may terminate the Purchase Option or pursue any
other remedy available to Tenant at law or in equity, including the right to
require specific performance by Landlord of Landlord's obligations provided in
this Article 22.
Payment. Simultaneously with delivery of the Deed, Tenant shall pay the Purchase
Price to Landlord by cashier's check, bank certified check, wire transfer or
other readily available funds.
Costs. Except as otherwise provided herein, Tenant will pay all expenses, costs
and disbursements incurred in connection with the exercise of this Purchase
Option including, without limitation, all recording and filing fees and all
transfer taxes and documentary stamps and similar taxes.
Lease Obligations. Upon conveyance of title and payment of the consideration as
provided in this Article, Tenant's obligations to Landlord under this Lease, and
Landlord's obligations to Tenant under this Lease, including without limitation
Landlord's provision of utilities, except for Tenant or Landlord obligations
which shall have theretofore accrued and be unpaid and unperformed, shall
terminate.
Default. If Tenant is in default under this Lease, Tenant may still exercise
this Purchase Option, provided such default is cured at or before closing of the
purchase.
Expiration of Option. This Purchase Option shall expire six (6) months prior to
the final expiration of the Term of this Lease.
IN WITNESS WHEREOF, each of the parties hereto has caused this Lease to be duly
executed as of the day and year first above written. LANDLORD Maverick Tube
Corporation
By:
Name:
Title:
TENANT
Commercial Resins Company, Inc.
By:
Name:
Title:
STATE OF )
) SS.
COUNTY OF )
On this ___ day of ____________, 2001, before me appeared
____________________, to me personally known, who being by me duly sworn, did
say that s/he is the ____________ of Maverick Tube Corporation, a Delaware
corporation, and acknowledged the instrument was signed on behalf of the
corporation by authority of its board of directors, and acknowledged the
instrument to be the free act and deed of the corporation.
__________________________________________
Notary Public
My commission expires: ________________
STATE OF )
) SS.
COUNTY OF )
On this ___ day of ____________, 2001, before me appeared
____________________, to me personally known, who being by me duly sworn, did
say that s/he is the ____________ of Commercial Resins Company, Inc., an
Oklahoma corporation, and acknowledged the instrument was signed on behalf of
the corporation by authority of its board of directors, and acknowledged the
instrument to be the free act and deed of the corporation.
__________________________________________
Notary Public
My commission expires: ________________
Exhibit Index
Exhibit A - Legal Description of the Demised Premises
Exhibit B - Plans and Specifications
Exhibit C - Base Rent
Exhibit D-1 - Landlord's Property Owned by Arkansas Development Finance
Authority
Exhibit D-2 - Landlord's Property Owned by Landlord
Exhibit E - Liens and Encumbrances on the Demised Premises