EXHIBIT 10.6
AMENDED AND RESTATED DEED OF LEASE
by and between
KLEARFOLD, INC.,
as Tenant
and
▇▇▇▇ CORPORATION,
as Landlord
June 7, 1996
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AMENDED AND RESTATED LEASE
This Amended and Restated Deed of Lease amends and restates that certain
Lease Agreement between Tenant and Landlord dated July 1, 1985, as amended by
Amendment to Lease dated November 14, 1985, as amended by Second Amendment to
Lease dated December 17, 1985, as modified by letter agreement dated March 15,
1995.
SECTION 1 Reference Information
Section 1.1. Reference Information. Reference in this Lease to any of
the following shall have the meaning set forth below:
Date of This Lease: June 7, 1996
Premises: Space "A" and Space "B" (as shown on Exhibit A) of the one-story
masonry and steel building (the "Building") on the 20.742 acre lot (the "Lot")
shown on Exhibit B, situated at Louisa County Industrial Air Park, Louisa,
Virginia, together with the right to use Tenant's Proportionate Fraction of the
parking from time to time provided on the Lot. Space "A" consists of 30,000
square feet and Space "B" consists of 20,000 square feet. Effective as of
January 1, 1998, the portion of the Building identified as Space "C" (as shown
on Exhibit A), consisting of 20,000 square feet, shall become part of the
Premises. In the event that the Expansion Option referenced in Section 2.4 is
exercised and effective as of January 1, 1998, the Premises shall be expanded to
include Space "D" (as shown on Exhibit A), which consists of 30,000 square feet.
Landlord: ▇▇▇▇ Corporation, f/k/a Klearfold/Virginia, Inc., a Virginia
corporation
Address of Landlord: ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
Tenant: Klearfold, Inc., a Pennsylvania corporation
Address of Tenant: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Term Commencement Date: June _, 1996
Term Expiration Date: December 31, ▇▇▇▇
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▇▇▇▇▇▇▇▇▇ ▇▇▇▇: One FIVE-YEAR additional term from January 1, 2006 to
December 31, 2010
Original Premises Square Footage: Fifty thousand (50,000) square feet. The
Premises square footage shall increase to 70,000 square feet on January 1, 1998
to include Space "C", and, in the event that the Expansion Option referenced in
Section 2.4 is exercised, the Premises Square Footage shall increase to 100,000
square feet on January 1, 1998.
Building Square Footage: One hundred thousand (100,000) square feet.
Annual Fixed Rental Rate:
From Commencement Date Space "A": $3.05 per square foot per
to December 31, 1997 annum (i.e., $91,500 per annum)
Space "B": $3.90 per square foot per
annum (i.e., $78,000 per annum)
From January 1, 1998 to Space "A": $3.05 per square foot
December 31, 2000 per annum (i.e., $91,500 per annum)
Space "B": $3.05 per square foot
per annum (i.e., $61,000 per annum)
Space "C": $3.05 per square foot
per annum (i.e., $61,000 per annum)
(If Expansion Option is exercised)
Space "D": $3.05 per square foot
per annum (i.e., $91,500 per annum)
From January 1, 2001 to Annual Fixed Rental Rate
December 31, 2005 calculated pursuant to Section
4.2, as of the commencement of
each calendar year.
During Extension Term Annual Fixed Rental Rate
calculated pursuant to Section
4.2, as of the commencement of
each calendar year.
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Fixed Rental: The annual fixed rent calculated in accordance with the
Annual Fixed Rental Rate.
Permitted Uses: Tenant's manufacturing operations, office space,
warehousing of inventory and related uses.
Liability Insurance Limit:
Bodily Injury Combined single per occurrence limit
and Property of $2,000,000 for bodily injury and property
Danage: damage
Tenant's Proportionate Fraction: A fraction the numerator of which shall be
the gross square footage of the Premises and the denominator of which shall be
the gross square footage of the Building.
Section 1.2. Exhibits. The following Exhibits are attached to and
incorporated in this Lease:
Exhibit A: Plan of Premises
Exhibit B: Description of Lot
SECTION 2 Premises and Term
Section 2.1. Premises. Landlord hereby leases and demises the Premises
to Tenant and Tenant hereby leases the Premises from Landlord, subject to the
terms and provisions of this Lease.
Section 2.2. Term. TO HAVE AND TO HOLD for an original term beginning
on the Term Commencement Date and continuing until the Term Expiration Date,
unless sooner terminated as hereinafter provided.
Section 2.3. Option to Extend Term. Tenant shall have the option to
extend the term of this Lease for the Extension Term as to Space "A", Space "B"
and Space "C" and, if the Expansion Option described in Section 2.4 shall have
been exercised, Space "D", provided Tenant shall have given written notice to
Landlord of its exercise of such option not less than nine months prior to the
expiration of the original term. All of the terms and provisions of this Lease
shall be applicable during the Extension Term except that Tenant shall have no
option to extend the term of the Lease beyond the Extension Term.
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Section 2.4. Expansion Option. Tenant shall have the option to lease
Space "D" shown on Exhibit A from January 1, 1998 until the end of the term of
this Lease, as the same may be extended (the "Expansion Option") provided Tenant
shall have given written notice to Landlord of its exercise of such option not
less than six months prior to January 1, 1998. If Tenant exercises the
Expansion Option, all of the terms and provisions of this Lease shall be
applicable to Tenant's use of Space "D," and the definition of "Premises" shall
be expanded to include Space "D".
SECTION 3 Condition of Premises
Section 3.1. Condition of Premises. Tenant agrees to accept the
Premises in its present "as is" condition.
SECTION 4 Fixed Rent
Section 4.1. The Fixed Rent. Tenant shall pay rent to Landlord at the
Address of Landlord or at such other place or to such other person or entity as
Landlord may by notice to Tenant from time to time direct, at the Annual Fixed
Rental Rate set forth in Section 1, in equal installments equal to one-twelfth
(1/12) of the Fixed Rental in advance on the first day of each calendar month
included in the term, and for any portion of a calendar month at the beginning
or end of the term, at the rate payable in advance for such portion.
Section 4.2. Producer Price Index Rate. For purposes hereof, the
"Producer Price Index" shall mean the national Producer Price Indexes for
Finished Goods as published monthly by the Bureau of Labor Statistics of the
U.S. Department of Labor with such index equal to 100 for the year 1982.
Effective as of January 1, 2001, the Fixed Rental for the aggregate of
Space "A", Space "B" and Space "C" (and, if the Expansion Option has been
exercised pursuant to Section 2.4, Space "D"), shall be increased in proportion
to the percentage increase in the Producer Price Index by comparing the Producer
Price Index for December, 1995 with the Producer Price Index for December, 2000.
The increased Annual Fixed Rental Rate shall be determined by multiplying a
fraction in which the December, 1995 Producer Price Index is the denominator and
the December, 2000 Producer Price Index is the numerator against the $3.05 per
square foot per annum Annual Fixed Rental Rate to determine the new Annual Fixed
Rental Rate. The Annual Fixed Rental, so determined, shall be effective for the
period January 1, 2001 through December 31, 2001.
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Thereafter, during the remainder of the current term of this Lease (the
period from January 1, 2002 through December 31, 2005), the Fixed Rental for
Space "A", Space "B" and Space "C" (and, if the Expansion Option has been
exercised pursuant to Section 2.4, Space "D") shall be increased annually, based
upon the percentage increase in the Producer Price Index. For the period January
1, 2002 through December 31, 2002, the calculation shall be made as in the
immediately preceding paragraph except that the numerator shall be the Producer
Price Index for December, 2001 and the denominator shall be the Producer Price
Index for December, 1995 with the fraction multiplied against the $3.05 per
square foot per annum Annual Fixed Rental Rate. For the period January 1, 2003,
through December 31, 2003, the numerator shall be the Producer Price Index for
December, 2002; and for the period January 1, 2004 through December 31, 2004,
the numerator shall be the Producer Price Index for December, 2003; and for the
period January 1, 2005 through December 31, 2005, the numerator shall be the
Producer Price Index for December 2004; and, if the Extension Term option has
been exercised pursuant to Section 2.3, for the period January 1, 2006 through
December 31, 2006, the numerator shall be the Producer Price Index for December,
2005; for the period January 1, 2007 through December 31, 2007, the numerator
shall be the Producer Price Index for December, 2006; for the period January 1,
2008 through December 31, 2008, the numerator shall be the Producer Price Index
for December, 2007; for the period January 1, 2009 through December 31, 2009,
the numerator shall be the Producer Price Index for December, 2008; and for the
period January 1, 2010 through December 31, 2010, the numerator shall be the
Producer Price Index for December, 2009. In each case, the denominator shall be
the Producer Price Index for December, 1995 and, in each case, the fraction
shall be multiplied against the $3.05 per square foot per annum Annual Fixed
Rental Rate.
In the event that the calculation of the Fixed Rental pursuant to this
Section 4.2 results in the reduction of the Fixed Rental, then the Fixed Rental
shall not be reduced but, for the period until the next rent adjustment shall be
calculated, shall be maintained at the level at which it was just prior to the
calculation which would have otherwise resulted in a reduction of the Fixed
Rental.
LEASES
SECTION 5 Real Estate and Other Taxes
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Section 5.1. Real Estate Taxes. As Additional Rent, Tenant shall pay
to Landlord Tenant's Proportionate Fraction of all taxes, assessments (special,
betterment or otherwise), levies, fees, water and sewer rents and charges, and
all other government levies and charges, general and special, ordinary and
extraordinary, foreseen and unforeseen, which are, at any time prior to or
during the term hereof, imposed or levied upon or assessed against the Lot or
Building (collectively "taxes and assessments" or if singular "tax or
assessment").
If, by law, any tax or assessment is payable, or may at the option of the
taxpayer be paid, in installments (whether or not any interest shall accrue on
the unpaid balance of such tax or assessment), Landlord shall elect to pay the
same in installments over a period of time to be mutually agreed to by Landlord
and Tenant but in no event longer than the longest amortization period available
to the taxpayer, and only the installments thereof (and interest thereon)
becoming due during the term shall be payable by Tenant hereunder.
All payments shall be made by Tenant within ten (10) days after receipt of
Landlord's invoice therefor.
Taxes or assessments shall not include any income taxes, excess profits
taxes, excise taxes, franchise taxes, estate, succession, inheritance or
transfer taxes.
SECTION 6 Insurance
Section 6.1. Tenant '5 Insurance. Tenant shall, as Additional Rent,
maintain throughout the term the following insurance:
(a) commercial general liability insurance for any injury to person or
property occurring on the Premises, naming as insureds Tenant, Landlord and such
persons, including, without limitation, Landlord's managing agent, as Landlord
shall designate from time to time, in amounts which shall, at the beginning of
the Term, be at least equal to the limits set forth in Section 1, and, from time
to time during the term, shall be for such higher limits as are reasonably
required by Landlord; and
(b) workers' compensation insurance with statutory limits covering all of
Tenant's employees working at the Premises.
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Section 6.2. Landlord's Insurance. Landlord shall maintain throughout
the Term the following insurance:
(a) commercial general liability insurance for any injury to person
or property occurring in the common areas of the Lot or Building, in such
amounts and with such deductibles as Landlord may reasonably consider
appropriate;
(b) all risk, special form property insurance on a replacement cost,
agreed amount basis, in an amount not less than one hundred percent (100%) of
the full insurable value of the Building, together with business interruption or
rental loss coverage and, if Landlord so elects, flood coverage to the extent
the same is available, insuring the Building and its rental value, with
deductibles not to exceed $10,000 or one percent (1%) of the face amount of the
policy, whichever is less; and
(c) insurance against loss or damage from sprinklers and from leakage
or explosions or cracking of boilers, pipes carrying steam or water, or both,
pressure vessels or similar apparatus, in the so-called "broad form," in such
amounts and with such deductibles as Landlord may reasonably consider
appropriate, and insurance against such other hazards and in such amounts as may
from time to time be reasonably required by any bank, insurance company or other
lending institution holding a mortgage on the Building.
For the purposes of this Section, the "full insurable value" shall mean the
actual cost of replacing the Building, without allowance for depreciation and
exclusive of the cost of excavations, foundations and footings, as determined by
the company issuing the insurance policy at the time the policy is issued. Not
more frequently than once every two (2) years, either party shall have the right
to notify- the other party that it elects to have the full insurable value
redetermined by the insurance company, and the insurance policy shall be
adjusted according to the redetermination when made by the insurance company.
All policies for insurance required under the provisions of this Section 6.2
shall be obtained from responsible companies qualified to do business in the
Commonwealth of Virginia and in good standing therein.
Section 6.3. Tenant Reimbursement of Insurance Taken Out by Landlord.
As Additional Rent, Tenant shall from time to time reimburse Landlord within
thirty (30) days of Landlord's invoice for Tenant's Proportionate Fraction of
Landlord's costs incurred in providing the insurance pursuant to Section 6.2.
Tenant shall reimburse Landlord
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for all of Landlord's costs incurred in providing such insurance to the extent
attributable to any special endorsement or increase in premium resulting from
the business or operations of Tenant or any special or extraordinary hazards
resulting therefrom.
Section 6.4. Requirements Applicable to Insurance Policies. All
policies for insurance required under the provisions of Section 6.1 shall be
obtained from responsible companies qualified to do business in the Commonwealth
of Virginia and in good standing therein, which companies and the amount of
insurance allocated thereto shall be subject to Landlord's approval, such
approval not to be unreasonably withheld or delayed. Tenant agrees to furnish
Landlord with insurance company certificates of all such insurance and copies of
the policies therefor prior to the Term Commencement Date and of each renewal
policy at least thirty (30) days prior to the expiration of the policy it
renews. Each such policy shall be noncancellable with respect to the interest of
Landlord and such mortgagees without at least thirty (30) days' prior written
notice thereto.
Section 6.5. Waiver of Subrogation. All insurance which is carried by
either party with respect to the Premises or the Building or to furniture,
furnishings, fixtures or equipment therein or alterations or improvements
thereto, whether or not required hereunder, shall include provisions which
either designate the other party as one of the insureds or deny to the insurer
acquisition by subrogation of rights of recovery against the other party to the
extent such rights have been waived by the insured party prior to occurrence of
loss or injury to the extent that such provisions may be effective without
making it impossible to obtain insurance coverage from responsible companies
qualified to do business in the Commonwealth of Virginia (even though extra
premium may result therefrom) and without voiding the insurance coverage in
force between the insurer and the insured party. On reasonable request, each
party shall be entitled to have duplicates or certificates of policies
containing such provisions. Each party hereby waives all rights of recovery
against the other for loss or injury against which the waiving party is
protected by insurance containing such provisions, reserving, however, any
rights with respect to any excess of loss or injury over the amount recovered by
such insurance.
SECTION 7 Utilities; Maintenance Expenses
Section 7.1. Utilities. Tenant shall pay to Landlord all charges for
water, sewer, gas, electricity and other utilities or services
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used or consumed in the Premises, whether called charge, tax, assessment, fee or
otherwise, including, without limitation, water and sewer use charges and taxes,
if any, such charges to be paid within ten (10) days of receipt of Landlord's
invoice therefor, the amount of such utilities to be determined in accordance
with separate meters for the Premises to be installed at Landlord's expense.
Section 7.2. Maintenance Expenses. Tenant shall pay to Landlord
Tenant's Proportionate Fraction of Landlord's costs and expenses incurred under
Section 9.
SECTION 8 Payments on Account
Section 8.1. Payments on Account. Tenant shall pay to Landlord on
account as Additional Rent, on the first day of each month during the term, one-
twelfth (1/12) of such amounts as Landlord may reasonably determine will be
sufficient to provide in the aggregate funds adequate to pay all amounts to be
paid by Tenant pursuant to Sections 5, 6 and 7 during each year included in the
term. Landlord shall periodically account to Tenant for such payments and any
balance owed by Tenant shall be paid to Landlord within ten (10) days after
billing therefor. Any excess paid by Tenant shall, at Landlord's option, either
be paid by Landlord to Tenant or credited against the next installment of rent
or Additional Rent becoming due.
SECTION 9 Landlord's Covenants
Section 9.1. Building Maintenance. Subject to Sections 10 and 11,
Landlord shall maintain, repair and replace, when necessary, the exterior walls
(exclusive of glass and doors and exclusive of the interior surfaces of the
exterior walls, all of which with respect to the Premises Tenant shall maintain
and repair), roof, foundation, structural supports of the Building, and heating,
plumbing, electrical, air conditioning and mechanical systems of the Building
and Premises, so as to keep the same in good order, condition and repair.
Section 9.2. Common Area Maintenance. Subject to Sections 10 and 11,
Landlord shall maintain, repair and replace, when necessary, the common areas of
the Building, if any, landscaped areas, and common areas on the Lot, including
parking areas, sidewalks and driveways, so as to keep the same in good order,
condition and repair, and shall clean and provide snowplowing for the same.
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SECTION 10 Tenant's Covenants
Section 10.1. Use. Tenant shall use the Premises only for the
Permitted Uses and shall from time to time procure all licenses and permits
necessary therefor at Tenant's sole expense.
Section 10.2. Repair and Maintenance. Except as otherwise provided in
Sections 9 and 11, Tenant shall keep all interior portions of the Premises in as
good order, condition and repair as they are in on the Term Commencement Date or
may be put in during the term, reasonable use and wear and tear and casualty
excepted. Tenant shall keep in a safe, secure and sanitary condition all trash
and rubbish temporarily stored at the Premises and shall arrange for and be
responsible for all of the costs of a trash and rubbish removal service in
connection with Tenant's use of the Premises.
Section 10.3. Compliance with Law and Insurance Requirements.
Tenant shall comply with the requirements of any law or ordinance or any order
or regulation of any public authority arising from Tenant's use of the Premises
and shall keep the Premises equipped with all safety appliances so required,
provided, however, that Tenant shall not be required to make any repairs,
alterations, additions or replacements to the Building structure or the Building
systems by reason of such requirements. Tenant shall not dump, flush, or in any
way introduce any hazardous substances or any other toxic substances into the
septic, sewage or other waste disposal system serving the Premises, or generate,
store or dispose of hazardous substances in or on the Premises or dispose of
hazardous substances from the Premises to any other location, other than in
compliance with the Resource Conservation and Recovery Act of 1976, 42 U.S.C.
(S)6901 et seq., and all other applicable federal, state or local codes,
regulations, ordinances and laws. "Hazardous substances" as used in this Section
shall mean "hazardous substances" as defined in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C. (S)9601 et seq. and
regulations adopted pursuant to such Act.
Tenant will provide Landlord, from time to time upon Landlord's request,
with all records and information regarding any hazardous substance maintained on
the Premises by Tenant.
Landlord shall have the right, at Tenant's expense, to make such
inspections as Landlord shall reasonably elect from time to time to determine if
Tenant is complying with this Section.
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Tenant shall comply promptly with the recommendations of any insurer which
may be applicable to the Premises by reason of Tenant's use thereof. In no event
shall any activity be conducted by Tenant on the Premises which may give rise to
any cancellation of any insurance policy or make any insurance unobtainable.
Section 10.4. Tenant's Work. Tenant shall not make any structural
installations, alterations, additions or improvements in or to the Premises,
without on each occasion obtaining the prior written consent of Landlord, such
consent not to be unreasonably withheld or delayed. Any such structural work so
approved by Landlord shall be performed only in accordance with plans and
specifications therefor approved by Landlord. Tenant shall procure at Tenant's
expense all necessary permits and licenses before undertaking any work on the
Premises and shall perform all such work in a good and workmanlike manner
employing materials of good quality and so as to conform with all applicable
zoning, building, fire, health and other codes, regulations, ordinances and laws
and with all applicable insurance requirements. Tenant shall keep the Premises
at all times free of liens for labor and materials. Tenant shall save Landlord
harmless and indemnified from all injury, loss, claims or damage to any person
or property occasioned by or growing out of such work. Landlord may inspect the
work of Tenant at reasonable times and give notice of observed defects.
Section 10.5. Indemnity. Tenant shall defend, with counsel approved by
Landlord, all actions against Landlord, any partner, trustee, stockholder,
officer, director, employee or beneficiary of Landlord ("Indemnified Parties")
with respect to, and shall pay, protect, indemnify and save harmless, to the
extent permitted by law, all Indemnified Parties from and against, any and all
liabilities, losses, damages, costs, expenses (including reasonable attorneys'
fees and expenses), causes of action, suits, claims, demands or judgments of any
nature arising from (a) injury to or death of any person, or damage to or loss
of property, occurring in the Premises or connected with the use, condition or
occupancy of any thereof unless caused by the negligence of Landlord or its
servants, agents, or contractors (b,) violation of this Lease by Tenant,
including any violations of Section 10.3, or (c) any act, fault, omission, or
other misconduct of Tenant or its agents, licensees, sublessees or invitees.
Section 10.6. Landlord's Right to Enter. Tenant shall permit Landlord
and its agents to enter into the Premises at reasonable times and upon
reasonable prior notice to examine the Premises, make such repairs and
replacements as Landlord shall be required to perform, or show the Premises to
prospective purchasers and lenders, and, during the
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last six months of the term, to show the Premises to prospective tenants and to
keep affixed in suitable places notices of availability of the Premises.
Section 10.7. Personal Property at Tenant '5 Risk. All furnishings,
fixtures, machinery, equipment, effects and property of every kind of Tenant and
of all persons claiming by, through or under Tenant which may be on the Premises
shall be at the sole risk and hazard of Tenant and if the whole or any part
thereof shall be destroyed or damaged by fire, water or otherwise, or by the
leakage or bursting of water pipes, steam pipes or other pipes, by theft or from
any other cause, no part of such loss or damage shall be charged to or to be
borne by Landlord, except that Landlord shall in no event be indemnified or held
harmless or exonerated from any liability to Tenant for any injury, loss, damage
or liability (i) not covered by Tenant's insurance to the extent prohibited by
law or (ii) caused by the negligence of Landlord, its employees, agents or
contractors. Tenant shall insure Tenant's personal property. Tenant shall have
the right to move its trade fixtures, machinery and equipment at the termination
of the Lease, including, without limitation, anything affixed to the Premises by
Tenant at its expense for purposes of trade, manufacture, ornamentation or
domestic use.
Section 10.8. Payment of Landlord's Cost of Enforcement.
Tenant shall pay, on demand, Landlord's expenses, including reasonable
attorneys' fees, incurred in enforcing any obligation of Tenant under this
Lease or in curing any default by Tenant under this Lease as provided in
Section 12.4.
Section 10.9. Yield up. At the expiration of the term or earlier
termination of this Lease, Tenant shall surrender all keys to the Premises,
remove all of its trade fixtures, machinery, and equipment and personal property
in the Premises, remove all Tenant's signs wherever located, repair all damage
caused by such removal and yield up the Premises (including all installations
and improvements made by Tenant except for trade fixtures, machinery, equipment
and Tenant's personal property) broom-clean and in the same good order and
repair in which Tenant is obliged to keep and maintain the Premises under this
Lease, wear and tear and casualty excepted. Any property not so removed Shall be
deemed abandoned and may be removed and disposed of by Landlord in such manner
as Landlord shall determine and Tenant shall pay Landlord the entire cost and
expense incurred by it in effecting such removal and disposition and in making
any incidental repairs and replacements to the Premises and for use and
occupancy during the period after the expiration
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of the term and prior to Tenant's performance of its obligations under this
Section 10.9.
Section 10.10. Estoppel Certificate. Each of the parties shall upon
not less than ten (10) business days' prior notice by the other, execute,
acknowledge and deliver to such other party a statement in writing certifying
that this Lease is unmodified and in full force and effect and that, except as
stated therein, the signer of Such certificate has no knowledge of any defenses,
offsets or counterclaims against Tenant's obligations to pay the Fixed Rental
and Additional Rent and any other charges and to perform its other covenants
under this Lease (or, if there have been any modifications that the same is in
full force and effect as modified and stating the modifications and, if there
are any defenses, offsets or counterclaims, setting them forth in reasonable
detail), the dates to which the Fixed Rental and Additional Rent and other
charges have been paid and a statement that such other party is not in default
hereunder (or if in default, the nature of such default, in reasonable detail).
Any such statement delivered pursuant to this Section 10.10 may be relied upon
the party requesting it or by any prospective mortgagee, PURCHASER, assignee or
subtenant.
Section 10.11. Rules and Regulations. Tenant shall comply with such
reasonable and nondiscriminatory Rules and Regulations as may be adopted from
time to time by Landlord to provide for the beneficial operation of the Lot and
Building, provided that such Rules and Regulations are uniformly enforced and do
not limit Tenant's rights under this Lease. Such Rules and Regulations shall be
binding upon Tenant ten (10) days following delivery of a copy thereof to Tenant
Section 10.12. Holding Over. Tenant shall vacate the Premises
immediately upon the expiration or sooner termination of this Lease. If Tenant
shall retain possession of the Premises or any part thereof after the
termination of the term without Landlord's express consent, Tenant shall pay
Landlord rent at the monthly rate specified in Section 1 for the time Tenant so
remains in possession and, in addition thereto, shall pay Landlord for all
direct damages, sustained by reason of Tenant's retention of possession. The
provisions of this Section shall not exclude Landlord's rights of reentry or any
other right hereunder, including, without limitation, the right to refuse the
monthly rent and instead to remove Tenant through summary proceedings for
holding over beyond the expiration of the term of this Lease.
Section 10.13. Assignment and Subletting. Tenant shall not assign,
transfer, mortgage or pledge this Lease or grant a security interest
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in Tenant's rights hereunder or sublease all or any part of the Premises or
suffer or permit this Lease or the leasehold estate hereby created or any other
rights arising under this Lease to be assigned, transferred or encumbered, in
whole or in part, without the prior written consent of the Landlord, such
consent not to be unreasonably withheld or delayed. Any attempted assignment,
transfer, mortgage, pledge, grant of security interest, sublease or other
encumbrance, except with prior written approval thereof from Landlord, shall be
void. No assignment, transfer, mortgage, grant of security interest, Sublease or
other encumbrance, whether or not approved, and no indulgence granted by
Landlord to any assignee or sublessee, shall in any way impair the continuing
primary liability (which after an assignment shall be joint and several with the
assignee) of Tenant hereunder, and no approval in a particular instance shall be
deemed to be a waiver of the obligation to obtain Landlord's approval in any
other case. Notwithstanding the foregoing, Tenant may enter into any of the
following transfers without obtaining the prior written consent of Landlord:
(a) Tenant may sublease all or part of the Premises or assign its
interest in this Lease to any corporation which controls, is
controlled by, or is under common control with the original
Tenant to this Lease by means of an ownership interest of more
than 50%;
(b) Tenant may assign its interest in this Lease to a corporation
which results from a merger, consolidation or other
reorganization in which Tenant is not the surviving corporation;
(c) Tenant may assign this Lease to a corporation which purchases or
otherwise acquires all or substantially all of the assets of
Tenant; and
(d) Tenant may mortgage and/or pledge this Lease and the leasehold
estate created hereby to The First National Bank of Boston, as
Collateral Agent for a syndicate of lenders under that certain
Revolving Credit and Term Loan Agreement to be entered into with
Tenant, pursuant to which such lenders have agreed to make
revolving credit loans and term loans to Tenant in an aggregate
amount not to exceed $43,000,000.
Section 10.14. Overloading and Nuisance. Tenant shall not injure,
overload, deface or otherwise harm the Premises, commit any
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nuisance, permit the emission of any objectionable noise, vibration or odor,
make, allow or suffer any waste or make any use of the Premises which is
contrary to any law or ordinance or which will invalidate any of Landlord's
insurance.
Section 10.15. Signs. Tenant at its cost shall have the right to
place, construct and maintain on the Premises one or more signs advertising its
business on the Premises. Any sign that Tenant shall erect Shall comply with
all laws and applicable governmental regulations and Tenant shall obtain any
approval required by Such laws.
SECTION 11 Casualty or Taking
Section 11.1 Termination. In the event that greater than twenty-five
percent (25%), or such lesser percentage in the event that the suitability of
the Premises for Tenant's use is adversely affected thereby, of the ground floor
area of the Building or the Lot shall be taken by any public authority or for
any public use or destroyed by the action of any public authority (a "Taking")
then this Lease may be terminated by either Landlord or Tenant effective on the
effective date of the Taking. In the event that, greater than 25%, or Such
lesser percentage in the event that the suitability of the Premises for Tenant's
use is adversely affected thereby, of the Premises shall be destroyed or damaged
by fire or casualty (a "Casualty") and if Landlord's architect, engineer or
contractor shall determine that it will require in excess of one hundred twenty
(120) days from the date of the Casualty to restore the Premises, this Lease may
be terminated by either Landlord or Tenant by notice to the other within thirty
(30) days after the casualty. In the case of a Taking, such election, which may
be made notwithstanding the fact that Landlord's entire interest may have been
divested, shall be made by the giving of notice by Landlord or Tenant to the
other within thirty (30) days after Landlord or Tenant, as the case may be,
shall receive notice of the Taking.
Section 11.2 Restoration. In the event of a Taking or a Casualty, if
neither Landlord nor Tenant exercises the election to terminate provided in
Section 11.1, this Lease shall continue in force and a just proportion of the
Fixed Rental and other charges hereunder, according to the nature and extent of
the damages sustained by the Premises shall be abated until the Premises or the
Building, or what may remain thereof, shall be put by Landlord in substantially
the same condition as the Premises were in prior to such Taking or Casualty
subject to zoning and building laws or ordinances then in existence, which,
unless Landlord or Tenant has exercised its option to terminate pursuant to
Section 11.1, Landlord covenants to do with reasonable diligence at
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Landlord's expense. Landlord's obligations with respect to restoration shall not
require Landlord to expend more than the net proceeds of insurance recovered
plus the amount of any deductible or net damages awarded for such Casualty or
Taking. "Net proceeds of insurance recovered" or "net damages awarded" refers
to the gross amount of such insurance or damages less the reasonable expenses of
Landlord in connection with the collection of the same, including, without
limitation. fees and expenses for legal and appraisal services. Notwithstanding
the foregoing, in the event that Landlord's mortgagee does not permit the net
proceeds of insurance recovered or net damages awarded for such Casualty or
Taking to be made available to Landlord for restoration, or in the event the net
proceeds of insurance recovered for such Casualty plus the amount of any
deductible or the net damages awarded for such Taking shall be insufficient to
fully restore the Premises or the Building, or in the event that the Casualty is
not insured against under the policy of insurance required to be maintained by
Landlord under Section 6.2, then Tenant shall have the right to terminate this
Lease unless Landlord agrees to contribute the amount by which the actual costs
of restoring the Premises exceed the net proceeds of insurance recovered or net
damages awarded.
SECTION 12 Default
Section 12.1. Events of Default. If
(a) Tenant shall default in the performance of any of its obligations to
pay the Fixed Rental, Additional Rent or any other sum payable hereunder and if
such default shall continue for ten (10) days after notice from Landlord
designating such default;
(b) within thirty (30) days after notice from Landlord to Tenant any other
default or defaults Tenant has not specifying commenced to correct the default
or diligently thereafter defaults so specified or has not diligently pursued
such correction to completion;
(c) a petition is filed by Tenant for liquidation, or for reorganization
or an arrangement or for any other relief under any provision of the Bankruptcy
Code as then in force and effect; or
(d) an involuntary petition under any of the provisions of the Bankruptcy
Code is filed against Tenant and such involuntary petition is not dismissed
within sixty (60) days thereafter,
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then, and in any of such cases, Landlord and the agents and servants of Landlord
lawfully may, in addition to and not in derogation of any remedies for any
preceding breach of covenant, and with or without process of law (forcibly, if
necessary) enter into and upon the Premises or any part thereof in the name of
the whole, or mail a notice of termination addressed to Tenant, and repossess
the same as of Landlord's former estate and expel Tenant and those claiming
through or under Tenant and without prejudice to any remedies which might
otherwise be used for arrears of rent or prior breach of covenant, and upon such
entry or mailing as aforesaid this Lease shall terminate, Tenant hereby waiving
all statutory rights (including, without limitation, rights of redemption, if
any) to the extent such rights may be lawfully waived.
Section 12.2. Remedies. In the event that this Lease is terminated
under any of the provisions contained in Section 12.1, Tenant shall remain
liable and shall pay punctually to Landlord all the sums and shall perform all
the obligations which Tenant covenants in this Lease to pay and to perform in
the same manner and to the same extent and at the same time as if this Lease had
not been terminated. In calculating the amounts to be paid by Tenant pursuant to
the preceding sentence, Tenant shall be credited with the net proceeds of any
rent obtained by Landlord by reletting the Premises, after deducting all
Landlord's reasonable expenses in connection with such reletting, including,
without limitation, all repossession costs, brokerage commissions, fees for
legal services and expenses of preparing the Premises for such reletting, it
being agreed by Tenant that Landlord may (a) relet the Premises or any part or
parts thereof for a term or terms which may at Landlord's option be equal to or
less than or exceed the period which would otherwise have constituted the
balance of the term hereof and may grant such concessions and free rent as
Landlord in its reasonable judgment considers advisable or necessary to relet
the same and (b) make such alterations, repairs and decorations in the Premises
as Landlord in its reasonable judgment considers advisable or necessary to relet
the same, and no action of Landlord in accordance with the foregoing or failure
to relet or to collect rent under reletting shall operate or be construed to
release or reduce Tenant's liability as aforesaid. Alternatively, at the option
of Landlord, in the event this Lease is so terminated, Landlord shall be
entitled to recover forthwith from Tenant as liquidated damages and not a
penalty, and in lieu of all other damages, the excess of the total rent reserved
for the residue of the term over the fair market rental value of the Premises
for the residue of the term, such excess to be discounted to present value at
per annum rate equal to the Base Rate of The First National Bank of Boston then
in effect.
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Section 12.3. Remedies Cumulative. Except as otherwise expressly
provided herein, any and all rights and remedies which Landlord may have under
this Lease and at law and equity shall be cumulative and shall not be deemed
inconsistent with each other, and any two or more of all such rights and
remedies may be exercised at the same time to the greatest extent permitted by
law.
Section 12.4. Landlord '5 Right to Cure Defaults. At any time
following ten (10) days' prior notice to Tenant (except in cases of emergency
when no notice shall be required), Landlord may (but shall not be obligated to)
cure any default by Tenant under this Lease, and whenever Landlord so elects,
all costs and expenses incurred by Landlord, including reasonable attorneys'
fees, in curing a default shall be paid by Tenant to Landlord as Additional Rent
on demand, together with interest thereon at the rate provided in Section 12.7
from the date incurred by Landlord to the date of payment by Tenant.
Section 12.5. Effect of Waivers of Default. Any consent or permission
by Landlord to any act or omission which otherwise would be a breach of any
covenant or condition herein, or any waiver by Landlord of the breach of any
covenant or condition herein, shall not in any way be held or construed (unless
expressly so declared) to operate so as to impair the continuing obligation of
any covenant or condition herein, or otherwise operate to permit the same or
similar acts or omissions except as to the specific instance. The failure of
Landlord to seek redress for violation of, or to insist upon the strict
performance of, any covenant or condition of this Lease shall not be deemed a
waiver of such violation nor prevent a subsequent act, which would have
originally constituted a violation, from having all the force and effect of an
original violation. The receipt by Landlord of rent with knowledge of the breach
of any covenant of this Lease shall not be deemed to have been a waiver of such
breach by Landlord or of any of Landlord's remedies on account thereof,
including its right of termination for such default.
Section 12.6. No Accord and Satisfaction. No acceptance by Landlord of
a lesser sum than the Fixed Rental, Additional Rent or any other charge then due
shall be deemed to be other than on account of the earliest installment of such
rent or charge due, unless Landlord elects by notice to Tenant to credit such
sum against the most recent installment due. Any endorsement or statement on
any check or any letter accompanying any check or payment as rent or other
charge shall not be deemed an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord's right to recover the
balance of
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such installment or pursue any other remedy under this Lease or otherwise.
Section 12.7. Interest on Overdue Sums. If Tenant shall fail to pay
Fixed Rental, Additional Rent or any other sum payable by Tenant to Landlord by
the due date thereof (i.e., the due date disregarding any requirement of notice
from Landlord or any period of grace allowed to Tenant), the amount so unpaid
shall bear interest at a variable rate (the "Delinquency Rate") equal to two
percent (2%) in excess of the base rate of The First National Bank of Boston
from time to time in effect commencing with the due date and continuing through
the day on which payment of such delinquent payment with interest thereon is
paid. If such rate is in excess of any maximum interest rate permissible under
applicable law, the Delinquency Rate shall be the maximum interest rate
permissible under applicable law.
SECTION 13 Superiority of Lease; Option to Subordinate
Section 13.1 Superiority of Lease; Option to Subordinate. This
Lease shall be superior to and shall not be subordinate to any mortgage on the
Premises except that Landlord shall subordinate this Lease to any mortgage of
the Premises provided that the holder of record thereof shall enter into an
agreement with Tenant, in such holder's customary form, by the terms of which
Such holder shall agree to (a) recognize the rights of Tenant under this Lease,
(b) perform Landlord's obligations hereunder arising after the date of such
holder's acquisition of title and (c) accept Tenant as tenant of the Premises
under the terms and conditions of this Lease in the event of acquisition of
title by such holder through foreclosure proceedings or otherwise and Tenant
shall agree to recognize the holder of such mortgage as Landlord in such event,
which agreement shall be made expressly to bind and inure to the benefit of the
Successors and assigns of Tenant and of the holder and upon anyone purchasing
the Premises at any foreclosure sale. Tenant agrees to execute and deliver any
appropriate instruments necessary to carry out the agreements contained in this
Section 13.1.
SECTION 14 Miscellaneous Provisions
Section 14.1. Notices from One Party to the Other. All notices
required or permitted hereunder shall be in writing and addressed, if to Tenant,
at the Original Address of Tenant or such other address as Tenant shall have
last designated by notice in writing to Landlord and, if to Landlord, at the
Original Address of Landlord or such other address as
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Landlord shall have last designated by notice in writing to Tenant. Any notice
shall be deemed duly given when delivered or tendered for delivery at such
address.
Section 14.2. Quiet Enjoyment. Landlord agrees that upon Tenant's
paying the rent and performing and observing the terms, covenants, conditions
and provisions on its part to be performed and observed, Tenant shall and may
peaceably and quietly have, hold and enjoy the Premises during the term without
any manner of hindrance or molestation from Landlord or anyone claiming under
Landlord, subject, however, to the terms of this Lease.
Section 14.3. Lease Not to Be Recorded; Notice of Lease. Tenant
agrees that it will not record this Lease. Landlord and Tenant agree that, on
the request of either, they will execute and record a notice or memorandum of
lease in form reasonably acceptable to Landlord and Tenant.
Section 14.4. Bind and Inure. The obligations of this Lease shall run
with the land, and this Lease shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns.
Section 14.5. Acts of God. In any case where either party hereto is
required to do any act, delays caused by or resulting from acts of God, war,
civil commotion, fire, flood or other casualty, labor difficulties, shortages of
labor, materials or equipment, government regulations, unusually severe weather,
or other causes beyond such party's reasonable control shall not be counted in
determining the time during which work shall be completed, whether such time be
designated by a fixed date, a fixed time or a "reasonable time," and such time
shall be deemed to be extended by the period of such delay.
Section 14.6. Landlord's Default. Landlord shall not be deemed to be
in default in the performance of any of its obligations hereunder unless it
shall fail to perform such obligations and unless within thirty (30) days after
notice from Tenant to Landlord specifying such default Landlord has not
commenced diligently to correct the default so specified or has not thereafter
diligently pursued such correction to completion.
Section 14.7. Miscellaneous. This Lease shall be governed by and
construed in accordance with the laws of the Commonwealth of Virginia. There are
no prior oral or written agreements between Landlord and Tenant affecting this
Lease.
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WITNESS the execution hereof under seal as of the day and year first above
written.
TENANT:
KLEARFOLD, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
LANDLORD:
▇▇▇▇ CORPORATION
By: [SIGNATURE ILLEGIBLE]
-----------------------------
Name:
Title:
Exhibit A
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Sketch Plan of Premises/Floor Plan of Spaces "A"-"D"
[SKETCH PLAN OF PREMISES/FLOOR PLAN OF SPACES "A"-"D" APPEARS HERE]
Exhibit B
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Legal Description of Lot
All that certain tract, parcel or lot of land lying and being situate in Louisa
Courthouse Magisterial District, Louisa County, VIRGINIA, containing 20.724
acres according to a Plat of Survey by ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇., P.C., dated November
16, 1984, revised May 20, 1985, entitled "Physical Survey of 20.724 Acres
Standing in the Name of KLEARFOLD/VA. Inc., Louisa District, Louisa County,
Virginia," a copy of which is recorded in the Clerk's Office of the Circuit
Court of Louisa County, Virginia, in Plat Book 7, Page 314.