LEASE
THIS
LEASE (the “Lease”) is made and entered into as of the 1st day of March, 2007,
by and between AGRACEL, INC., an Illinois
corporation, of Effingham, Illinois, hereinafter referred
to as “Lessor” and GRAIN SYSTEMS, INC., an Illinois
corporation, of Assumption,
Illinois, hereinafter referred to as
“Lessee.”
1. PROPERTY
LEASED: Lessor hereby leases to
Lessee and Lessee hereby leases from Lessor that certain parcel of real property
legally described in Exhibit A (the “Land”), together with all of the
improvements now or hereafter on the Land (the “Building”). The Land
and the Building are hereafter referred to as the “Premises.”
2. RENTAL: Lessee
shall pay to Lessor rent for the Initial Term, as hereinafter defined, of the
Lease in the amount of Three Million One Hundred Fifty Thousand Three Hundred
Ninety and 95/100 Dollars ($3,150,390.95) (the “Rent”), payable monthly on the
first day of each month commencing on March 1, 2007 as follows:
Year
1
(March 1, 2007-February 28, 2008)---------------------$23,433.33 per
month;
Year
2
(March 1, 2008-February 29, 2009)---------------------$24,019.17 per
month;
Year
3
(March 1, 2009-February 28, 2010)---------------------$24,619.65 per
month;
Year
4
(March 1, 2010-February 28, 2011)---------------------$25,235.14 per
month;
Year
5
(March 1, 2011-February 28, 2012)---------------------$25,866.02 per
month;
Year
6
(March 1, 2012-February 28, 2013)---------------------$26,512.67 per
month;
Year
7
(March 1, 2013-February 28, 2014)---------------------$27,175.48 per
month;
Year
8
(March 1, 2014-February 28, 2015)---------------------$27,854.87 per
month;
Year
9
(March 1, 2015-February 28, 2016)---------------------$28,551.24 per
month;
Year
10
(March 1, 2016-February 28, 2017)--------------------$29,265.02 per
month;
(i) without
advance notice, demand, offset, or deduction;
(ii) Past
due rent shall bear interest at the rate of 1.5% per month prorated on a daily
basis from five (5) days after the date due.
3. This
paragraph 3 is intentionally left blank.
4. TERM:
(a)
Initial Term. The initial term of this Lease shall
be for ten (10) years, beginning on March 1, 2007 (the “Commencement Date”) and
ending on February 28, 2017 (the “Initial Term”).
(b) Extended
Terms. Lessee shall have two (2) five-year options to extend
the Initial Term of this Lease on the same terms and conditions, except
that:
(i) the
rent for the eleventh year shall be the 10th year’s rent times
102.5%. Subsequent years’ rent shall be calculated by multiplying the
previous year’s rent by 102.5%; rent shall be payable in equal monthly
installments on the 1st day of
each month
of each year of an extended term; and
(ii)
The
public liability insurance limits set forth at 9(b) shall increase to
$2,500,000.00 for injury or death to any one person and $2,500,000.00 for any
one accident and $1,000,000.00 with respect to damage to property. The Lessee
shall be deemed to have exercised its option to renew
1
the
lease
for an additional 5-year term unless it gives written notification not less
than
120 days prior to the end of its then current term.
5. SECURITY
DEPOSIT: Lessee agrees to pay a security deposit of Twenty Nine
Thousand Two Hundred Sixty Five and 02/100 Dollars ($29,265.02), which shall
be
held by the Lessor in an interest bearing account as security for the faithful
performance by Lessee of all of the terms of this Lease by Lessee to be observed
and performed. Interest on the account will be retained by and
taxable to Lessor. At the end of the lease term, provided the Lessee
has fulfilled its obligation under the Lease, the deposit will be returned
to
Lessee within thirty days of the end of the Lease.
6. USE
OF PREMISES: The Premises are leased for the purpose of
light manufacturing and assembly by Lessee and such other activities as are
reasonably associated therewith and are not to be used for any other purpose
without first having secured the written consent of the Lessor, which consent
shall not be unreasonably withheld. No use of the Building shall be
made which would increase the insurable risk of the Building for fire and “all
risk” insurance. Provided, however, that the Lessor consents to the
use of the Premises by the existing tenants identified in Exhibit
B.
7. PUBLIC
REQUIREMENTS:
(a) Lessor
warrants that,
except for conditions resulting from Lessee’s activities on the Premises, on the
Commencement Date the Premises will conform with all laws, ordinances,
governmental orders and regulations and other public requirements now and
hereafter affecting the Premises or the use thereof, including but not limited
to all recorded covenants and restrictions, if any. Lessee shall save and hold
Lessor harmless from expense or damage resulting from failure to do so on and
after the Commencement Date, except for such lack of such compliance which
exists and affects the Premises or the use thereof at the Commencement Date
of
this Lease and not resulting from Lessee’s activities on the Premises. Lessor
guarantees that the Premises is properly zoned for those uses of the Premises
described in paragraph 6.
(b) Lessee
shall do or cause
to be done all things necessary to preserve and keep in full force and effect
permits required, if any, for the conduct of its business and operations from
the Commencement Date until its expiration or termination.
8. ASSIGNING
AND
SUBLEASING: Lessee may sublet the Premises or any part thereof and
Lessee may assign, transfer, pledge, mortgage or otherwise encumber this Lease,
or any portion of the term thereof, with the previous written consent in each
instance of Lessor, which consent shall not be unreasonably withheld, and Lessee
shall furnish to Lessor with each request a copy of such proposed
instrument. Subject to paragraph 6, Lessor agrees, however, not to
arbitrarily withhold consent to subletting for any legitimate business
purpose. Credit worthiness, in Lessor’s reasonable discretion, shall
be a reasonable grounds for withholding consent to an assignment or
sublet. In the event of such consent by Lessor and assignment or
transfer by Lessee, the Lessee shall from the date of such assignment be
released from any and all liability to Lessor under all covenants of this Lease,
and by accepting any assignment or subletting, an assignee or sublessee shall
become bound by and shall perform and shall become entitled to the benefits
of
all the terms, conditions and covenants by which the Lessee hereunder is
bound.
Permission
is, however, granted Lessee to assign or transfer this Lease and also to sublet
the Premises to any subsidiary corporation of Lessee, affiliate corporation
of
Lessee, or parent corporation of Lessee, upon giving Lessor written notice
of
intent so to do. Lessee shall have the right to transfer and assign
this Lease without Lessor’s consent to any parent, subsidiary, or affiliated
company of Lessee or to any person or corporation acquiring all or substantially
all of the assets of Lessee by purchase, merger, consolidation or
otherwise. An affiliate company is a company which has at least a 50%
common
2
ownership
with Lessee. Transfers of Lessee’s shares of stock as may occur from
time to time shall not be deemed a prohibited assignment of this
Lease. In the event of assignment pursuant to the
preceding paragraph, Lessee shall remain the principal obligor to the Lessor
under all covenants of this Lease, and by accepting any assignment or
subletting, an assignee or sublessee shall become bound by and shall perform
and
shall become entitled to the benefits of all the terms, conditions and covenants
by which the Lessee hereunder is bound.
9. INSURANCE--LESSEE:
(a) Lessee
shall, throughout
the term of this Lease, maintain a standard fire insurance policy with an “all
risk” endorsement on the Premises in an amount equal to the replacement cost
thereof, in a company or companies rated Best A or better. The
initial replacement cost agreed upon by the parties is set forth in Exhibit
G. The Parties shall annually review the replacement cost and agree
upon the replacement cost for the ensuing year. If the Parties cannot mutually
agree on a replacement cost each year after the first year, the cost shall
be
set at the previous year plus an increase based upon the consumer price index.
Each year a written record of such agreement shall be signed by both
parties.
(b) Lessee
shall, at its
expense, during the term hereof, maintain and deliver to Lessor public liability
insurance policies with respect to the Premises and deliver to Lessor
certificates of insurance evidencing such insurance with respect to the
Premises. Such policies shall name the Lessee as the named insured,
Lessor as an additional insured, and if requested by Lessor, Lessor’s mortgagee,
as additional insureds as their interests may appear. Such insurance
shall have limits of at least $2,000,000 for injury or death to any one person
and $2,000,000 for any one accident, and $1,000,000 with respect to damage
to
property. Such policies shall be in whatever form and with such
insurance companies as are reasonably satisfactory to Lessor, and shall provide
for at least ten days’ prior notice to Lessor of cancellation. At
least ten days before any such policy expires, Lessee shall supply to Lessor
reasonable written assurance of continuation of such insurance and at least
ten
days after such policy expires; Lessee shall supply to Lessor a certificate
of
insurance evidencing continuing insurance. Lessor may, in order to prevent
a
lapse of coverage, procure such policies or pay such premiums
thereon. In such case, Lessor shall notify Lessee in writing of
Lessor’s intent, and all amounts so paid by Lessor, with interest thereon at the
rate of 4% over Wall Street Journal’s published prime rate as published
from time to time per annum, shall be added to the next monthly rent installment
coming due, and shall be collected as additional rent.
(c) Lessee
shall be responsible for its equipment, furniture, fixtures, inventory and
other
personal property located on the Premises and shall be solely responsible for
carrying whatever insurance it desires with respect to such
property.
(d) Lessor
and Lessor’s
mortgagee, if any, shall at all times be named as co-additional insureds or
loss
payees as their interests may appear on all policies of insurance required
by
this Lease and Lessee shall provide to Lessor and Lessor’s mortgagee, if any, a
current certificate showing compliance with this requirement, provided that
Lessor shall have notified Lessee in writing of the name and address of such
mortgagee. Each policy of insurance shall require notice to Lessor
and Lessor’s mortgagee prior to cancellation.
10. TAXES: Lessee
shall pay all real property taxes, personal property taxes and special
assessments lawfully levied against the Premises during the term of this
Lease. Taxes for the first and last year of the Lease shall be
prorated between Lessor and Lessee, based upon the number of days
leased.
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Lessee
shall have the right to contest the amount or validity, in whole or in part,
of
any tax by appropriate proceedings diligently conducted in good
faith. If the provisions of any law or regulation then in effect so
require, Lessor shall join in such proceedings.
11. MAINTENANCE
BY
LESSEE: Lessee agrees to take good care of the Premises, and
to keep them in good repair, free from filth, danger of fire or any pest or
nuisance, and to keep all mechanical systems in good working
order. To the extent not provided by construction warranties and
manufacturers’ warranties, Lessee shall conduct a continuing program of
preventive maintenance covering such mechanical equipment, including regular
service and maintenance (but not replacement) to heating and air conditioning
equipment by competent tradesmen. Lessee agrees to maintain, with no obligation
to replace the exterior walls, roof and structure of the Building. Lessee shall
not permit any waste of the Premises. At the expiration or other
termination of this Lease, Lessee shall return the Premises to Lessor in broom
clean condition, except only for normal wear and use, damage by fire, explosion
or other insured casualty and acts of third parties not under control of
Lessee. If Lessee fails to do anything required of Lessee in this
paragraph within a reasonable time, Lessor may, at Lessor’s option, perform the
same at Lessee’s expense.
12. MAINTENANCE
BY
LESSOR: Lessor shall not be responsible for any
maintenance or repair of the Premises.
13. UTILITIES: Lessee
shall contract in its own name and pay for all charges for water, sewer charges,
gas heat, oil, electricity, fuel, telephone and other utilities used in or
serving the Premises during the term of this Lease.
14. ALTERATIONS
AND
ADDITIONS: Lessee shall have the right, at its sole expense,
to make non-structural additions, improvements, or modifications to the interior
of the Building on the Premises for the convenient conduct of its
business. All such changes shall be made in a good and workmanlike
manner and in accordance with applicable codes and
regulations. Lessee shall give Lessor prior written notice of any
alterations, additions, improvements or modifications so made.
Lessee
shall have the right to install
such machinery, equipment, and business and trade fixtures as it deems
necessary, and such items shall remain the property of Lessee and shall be
removed at the termination of this Lease, the Lessee repairing any damage
occasioned by removal. If Lessee shall obtain written consent of
Lessor to leave any machinery or like equipment in the Premises, then the full
title to such machinery and equipment shall thereupon pass to
Lessor.
Lessee
shall be permitted to construct improvements to the Premises in accordance
with
the initial description of the Lessee’s Improvements set forth in Exhibit F
(“Lessee’s Improvements”), and any Lessor and Lessee shall work together to
facilitate the making of such improvements.
Lessee
shall control construction of Lessee’s Improvements and shall select a qualified
contractor or contractors to construct Lessee’s Improvements, such selection
having been made, submitted to Lessor and Lessor hereby approves of such
selections.
Upon
execution of this Lease by the Lessor and the Lessee, Lessor shall pay Lessee
the total sum of Nine Hundred Thousand Dollars ($900,000) to be paid in two
installments; the first One Hundred Thousand Dollars ($100,000) to be paid
upon
the Commencement Date and the balance of Eight Hundred Thousand Dollars
($800,000) on or before April 1, 2007. One part of such total sum is
to be used by Lessee to make the Lessee’s Improvements, and one part of such
total sum is to be used by Lessee to satisfy the undertakings of Lessee set
forth in the inducement agreements attached at Exhibit C.
4
Lessee’s
construction of Lessee’s
Improvements shall be executed in a good and workmanlike manner. All
materials used in Lessee’s Improvements will be of good
quality. Lessee’s Improvements shall be of good workmanship and
material and shall neither reduce the size of the Premises nor impair the
strength of the Building. There shall be no construction fee paid to
Lessor.
Lessee
shall take proper precautions
for the safety of the public. Lessor shall not be responsible for any
loss or damage to or arising from Lessee’s Improvements except to the extent
arising from Lessor’s negligence or willful misconduct.
Lessee
shall, at its expense, (i) cause
all of Lessee’s Improvements to comply strictly with, and give all notices
required by, all applicable local, state and federal laws, ordinances, rules,
regulations, codes and orders (hereinafter referred to collectively as “Legal
Requirements”); and (ii) obtain all building permits and any other permits
required from any and all jurisdictions governing the Premises or construction
of Lessee’s Improvements.
15. LESSOR’S
RIGHT
OF ENTRY: Lessor, or Lessor’s agent, may enter upon the
Premises at reasonable hours upon at least twenty-four (24) hours notice (except
in cases of emergency) to examine the same and to do anything required of Lessor
hereunder or which Lessor may deem necessary for the good of the Premises;
and
during the last 90 days of this Lease may display a sign offering the Premises
for sale or for lease, which sign may be affixed in a conspicuous place on
the
front of the Premises.
Neither
Lessor nor any of Lessor’s
agents who enters upon the Premises shall disclose to any person or entity
any
information, observations, data, or visual impressions regarding the business
of
Lessee. Lessor and any of its agents agree that they will not take
any photographs, videotapes or other images of the interior of the Premises
without the prior consent of Lessee.
16. SIGNS
AND
ADVERTISEMENTS: Lessee is hereby granted the privilege of
erecting and maintaining signs on the front of the Premises, including in the
front and side yards of the Building, subject to applicable laws and
regulations, including but not limited to ordinances of the municipality in
which the Premises are located and restrictive covenants relating to signs
in
the industrial park in which the Premises are located, if
applicable. No signs shall be erected which are attached to the roof
of the Building and no signs shall be attached to the Building at right angles
suspended by guy wires, but shall be attached flush to the Building in a safe
and secure manner. All such signs shall advertise the Lessee’s
business. No revenue producing signs shall be placed on the
Premises. Lessee shall not paint any signs directly on the Building,
or otherwise deface, damage or overload the Building. Lessee shall
remove all signs at the termination of this Lease, and shall repair any damage
to the Building caused by signs at its sole cost and expense.
17. LIABILITY: Lessee
hereby relinquishes all claims, releases, assumes all risks and agrees to hold
Lessor harmless from any liability for any damage done or occasioned by or
from
any plumbing, wiring, gas, water, steam, sprinkler system, equipment or other
pipes, or the bursting, leaking or running of any tank, washstand, water closet,
waste pipe or other articles in, above, upon or about the Building or Premises,
or for damage occasioned from or by water, snow, or ice being upon or about
the
Premises unless caused by the negligence or intentional act of Lessor, its
agents or employees.
Lessor
and Lessee hereby expressly
waive any cause of action or right of recovery which either may have hereafter
against the other for any loss or damage to the Premises, or to the contents
thereof, from all claims and liabilities arising from or caused by any hazard
that could be covered by a standard fire insurance policy with an “all risk”
endorsement on the Premises or on the contents thereof, to the extent of any
amounts actually received or which could have been received had the proper
insurance been
5
in
place,
and each party hereto shall request a waiver from any insurance carrier with
which it carries insurance covering the Premises, or the contents thereof,
releasing its subrogation rights as against the other party, and upon request
by
either party evidence of said waiver shall be furnished by each party hereto
to
the other party.
During
the term of this Lease, Lessee
agrees to save and hold Lessor harmless from any claim, damage, liability,
or
expense arising from any injury (including death) to persons or damage to
property occurring in, on or about the Premises during the term of this Lease,
except to the extent caused by the Lessor, its agents and
employees. In the event of the negligence of more than one party, the
parties shall be liable to one another for their proportionate
share.
18. DAMAGE
BY
CASUALTY: If, during the term hereof, or previous thereto,
the Premises or any Building of which the Premises are a part shall suffer
damage by fire, explosion, or any other casualty to the extent that the Premises
or Building cannot reasonably be repaired within 90 days after date of such
damage, with the proceeds of such insurance, in the judgment of Lessor and
Lessee, or if they cannot agree, a mutually agreeable third party qualified
in
the construction industry in or about Christian County, Illinois, or to such
an
extent that under the then existing laws, orders, ordinances or other public
requirements the same cannot be repaired to substantially the same form and
with
substantially the same materials as before such damage, then the term shall,
at
the option of either party exercised by written notice not later than sixty
(60)
days after the occurrence of such casualty, terminate as of the date of such
damage and rent shall cease as of the date of such damage (with proportionate
refund of any prepayment) on condition Lessee forthwith surrenders the Premises
to Lessor. If this Lease is not so terminated, then Lessor shall
repair the Premises as soon as practicable with due diligence. A
maximum of 120 days shall be considered a reasonable time in which to complete
repairs barring any extraordinary circumstances or matters beyond the control
of
Lessor, placing the same in as good condition as they were just before such
damage, and rent shall xxxxx pro rata and in proportion to untenantability
of
the Premises (or if the undamaged portion is not reasonably usable for Lessee’s
purposes pending the restoration of the Building, all rent shall xxxxx) from
the
time of such damage until restoration of the Premises by Lessor. It
is further agreed that the period for reconstruction shall be extended for
such
time during which strikes, riots, civil commotion, governmental intervention,
acts of God, or any other contingency beyond Lessor’s control shall delay the
construction. In case of such damage, whether this Lease is thereby
terminated or not, Lessee shall remove all of the rubbish and debris of Lessee’s
property within sixty (60) days after written request by Lessor, and if this
Lease is not thereby terminated, Lessee shall not do anything to hinder or
delay
Lessor’s work of repair, and will cooperate with Lessor in such
work. Lessor shall not be liable for inconvenience to Lessee by
making repairs to any part of the Premises or Building, nor for the restoration
of any improvements made by Lessee, nor for the restoration of any property
of
Lessee.
19. DEFAULT: If
there be default in payment of any rent or in any other of Lessee’s obligations
hereunder, or if the Premises be vacated by Lessee without adequate provision
for building security and maintenance, and if such default or condition shall
continue after thirty (30) days’ notice, in writing, from Lessor to Lessee to
make good such default or correct such condition, Lessor may, at Lessor’s
option, at any time thereafter while such default or condition continues,
without further notice or demand, declare this Lease terminated and enter upon
and repossess the Premises free of this Lease; or Lessor may, at Lessor’s
option, enter upon and repossess the Premises as aforesaid or receive the keys
thereto, Lessee hereby acknowledging that the Lessor has received same as Agent
of the Lessee and is authorized to re-let the Premises for the balance of the
term of this Lease, for a shorter or longer term, and upon prevailing market
rates and terms, and may receive the rents therefor, applying the same first
to
the payment of the reasonable expense of such re-letting and second to the
payment of rent due and to become due under this Lease, Lessee remaining liable
for and agreeing hereby to pay Lessor any deficiency. Lessor shall
make reasonable efforts to re-lease the Premises. Listing the
Premises for re-lease with a reputable broker shall be considered a reasonable
effort, but all reasonable broker’s
6
commissions
shall be at Lessee’s expense. Provided, however, if any such default
be other than for non-payment of money and it would take more than thirty (30)
days to cure the same, Lessor shall not be entitled to terminate this Lease
or
enter upon the Premises for such default if Lessee begins the cure of such
default within said thirty (30) days and prosecutes the cure thereof with due
diligence to completion.
20. EMINENT
DOMAIN: If the Premises or any substantial part thereof
shall be taken by any competent authority under the power of eminent domain,
or
a conveyance thereof be made in lieu of or in anticipation of the exercise
of
such power, or if the Premises or any substantial part thereof be acquired
for
any public or quasi-public use or purpose, the term of this Lease shall cease
and terminate upon the date when the possession of the Premises or the part
thereof so taken shall be required for such use or purpose.; provided, however,
that Lessee, upon filing of a petition for separate valuation, shall
have the right to receive that portion of any proceeds received from the
condemnor as compensation for the taking of the Premises that is the fair market
value of the Lessee’s interest in the Premises as Lessee, and further, Lessee
shall be entitled to any additional compensation that might be allowed for
the
relocation or other expenses of the Lessee in relocating from the Premises
as a
result of the taking. If any condemnation proceeding shall be
instituted in which it is sought to take or damage any part of Lessor’s Building
or the Land under it, Lessor or Lessee shall have the right to cancel this
Lease
after having given written notice of cancellation to the other not less than
ninety (90) days prior to the date of cancellation designated in the
notice. Rent at the then current rate shall be apportioned as of the
date of the termination. Nothing in this paragraph shall preclude an
award being made to Lessee for loss of business or depreciation to and cost
of
removal of equipment or fixtures.
21. MECHANIC’S
LIENS: Lessee will not permit any mechanic’s liens, or other
liens, to be placed upon the Premises or any building or improvement thereon
during the term hereof as a result of Lessee’s actions, and in case of the
filing of any such lien, Lessee will promptly pay same; provided, however,
that
Lessee shall have the right to contest the validity or amount of any such lien
upon posting security with Lessor which in Lessor’s sole reasonable judgment is
adequate to pay and discharge any such lien in full if held
valid. Lessee shall have sixty (60) days after filing to pay the lien
or post security as provided. If default in payment thereof shall
continue for thirty (30) days after notice thereof from Lessor to Lessee (unless
Lessee shall have posted security as aforesaid), Lessor shall have the right
and
privilege at Lessor’s option of paying the same or any portion thereof without
inquiry as to the validity thereof, and any amounts so paid, including expenses
and interest, shall be immediately due by Lessee to Lessor and shall be paid
promptly upon presentation of xxxx therefor.
Lessor
covenants that it will not
permit any mechanic’s liens to be placed on the Premises, and that, should such
lien be recorded against the Premises, Lessor will ensure its removal not later
than thirty (30) days after written demand therefor is made upon Lessor by
Lessee.
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22. MORTGAGES
AND
ESTOPPEL CERTIFICATES: This Lease shall be subject and
subordinate to any mortgage or deed of trust now or at any time hereafter
constituting a lien or charge upon the Premises or the improvements situated
thereon; provided that Lessee and the holder of such mortgage or deed of trust
shall have entered into a non-disturbance and attornment agreement in form
and
content reasonably acceptable to such parties. Subject to the
foregoing, Lessee shall at any time hereafter on demand execute any instruments,
releases or other documents which may be required by any such mortgagee for
the
purpose of subjecting and subordinating this Lease to the lien of any such
mortgage. However, notwithstanding any provisions of this paragraph
to the contrary, as a condition precedent to such subordination, each such
mortgage shall expressly provide Lessee with a non-disturbance agreement that
so
long as Tenant is not in default under said Lease, Tenant’s quiet possession of
the Premises shall remain undisturbed, on the terms and conditions stated
herein, whether or not the mortgage is in default and notwithstanding any
foreclosure or other action brought by the holder of the mortgage in connection
herewith.
Lessor
and Lessee agree at any time and
from time to time, upon not less than thirty (30) days’ prior request by Lessor,
to execute, acknowledge and deliver to the requesting party, a statement in
writing certifying that (i) this Lease is unmodified and in full force and
effect (or if there have been modifications that the same is in full force
and
effect as modified and identifying the modifications), (ii) the dates to which
the base rent and other charges have been paid, and (iii) so far as the person
making the certificate knows, the requesting party is not in default under
any
provisions of this Lease (or if there are defaults, specifying the
defaults). It is intended that any such statement may be relied upon
by any person proposing to acquire the requesting party’s interest in this Lease
or the Premises, or any prospective mortgagee of, or assignee of any mortgage
upon such interest or the Premises.
23. This
paragraph 23 is intentionally left blank.
24. ENVIRONMENTAL
COVENANTS AND WARRANTIES: Lessee, at Lessee’s expense, shall
comply with all applicable federal, state and local laws, regulations, or
ordinances pertaining to air and water quality, hazardous materials (as
hereinafter defined), waste disposal, air emissions, and other environmental
compliance matters, and with any direction of any public officer or officers
empowered to enforce such laws, regulations or ordinances, pursuant to law,
which shall impose any duty upon Lessor or Lessee with respect to any of the
foregoing which arise during or after the Lease term as a result of
contamination by hazardous material attributable to Lessee’s use or activities,
or the use or activities of Lessee’s agents or contractors, except that Lessee
shall not be liable to make changes or improvements to the Premises not
specifically necessitated by the nature or form of its business or operations,
except to the extent that Lessee may be contesting such enforcement action
in
good faith for the period of contest.
25. ENVIRONMENTAL
INDEMNIFICATION:
(a) Lessee
shall indemnify,
defend and hold Lessor harmless from any and all claims, judgments, damages,
penalties, fines, costs, liabilities, or losses (including, without limitation,
diminution in value of the Premises, damages for the loss or restriction on
use
of rentable or usable space or of any amenity of the Premises and reasonable
sums paid in settlement of claims, reasonable attorney’s fees, reasonable
consultant fees, and reasonable expert fees) which arise during or after the
Lease term as a result of contamination by hazardous material attributable
to
Lessee’s use or activities, or the use or activities of Lessee’s agents or
contractors. This indemnification of Lessor by Lessee includes,
without limitation, costs incurred in connection with any investigation of
site
conditions or any cleanup, remedial, removal, or restoration work required
by
any federal, state, or local government agency or political subdivision because
of hazardous material present in the soil or groundwater on or under the
Premises as a result of Lessee’s use or activities, or Lessee’s agents or
contractors, or which would have with reasonable care exerted by Lessee not
have
occurred. Without limiting the foregoing, if the presence of any
hazardous
8
material
on the Premises caused or permitted by Lessee or its agents or contractors,
results in any contamination of the Premises, Lessee shall promptly take all
actions at its sole expense as are necessary to return the Premises to the
condition existing prior to the release by Lessee or its agents or employees
of
any such hazardous material on the Premises, provided that Lessor’s approval of
such actions shall first be obtained, which approval shall not be unreasonably
withheld so long as such actions would not potentially have any material adverse
long-term or short-term effect on the Premises. The foregoing
indemnity shall survive the expiration or earlier termination of this
Lease.
(b) Lessee
shall promptly
provide Lessor with copies of all citations, directives, summonses, information
orders, notices of potential responsibility, notices of violation or
deficiencies, orders or decrees, claims, complaints, investigations, judgments,
letters, notices of environmental liens or response actions, and any other
communications and/or documents from any federal, state or local governmental
agency or any third Party pertaining to the presence of hazardous materials
on
the Premises, and/or Lessee’s compliance with applicable environmental statutes,
rules and regulations.
(c) Not
less than ten (10)
days prior to the expiration of this Lease or any extension hereof, Lessee
shall
select a professional registered engineer who is an “environmental professional”
as defined in 415 ILCS 5/22.2 to conduct an investigation of the Premises for
the purpose of investigating environmental conditions on the
Premises. Upon selection, Lessee shall identify the engineer to
Lessor. Lessor shall have the right to reject such selection if, in
Lessor’s reasonable opinion, the professional selected is not able to render the
opinion required because of a lack of competence or the existence of
bias. In the event of any such rejection by Lessor, the Parties shall
meet in good faith to confer and agree upon a substitute “environmental
professional.” The cost of the investigation shall be at Lessee’s
sole expense. If the engineer, after conducting his or her
investigation, states in writing the engineer’s opinion he or she observes no
significant contamination by hazardous material(s) since the date of the
Pre-Commencement Environmental Report (hereinafter defined) at, on, to or from
the Premises directly resulting from the use by Lessee, its employees, agents
or
customers of the Premises, then no further action on Lessee’s part shall be
required. If the engineer will not or does not so state within thirty
(30) days after his or her selection, then Lessee shall select an “environmental
professional” as defined in 415 ILCS 5/22.2 to conduct at Lessee’s sole expense
a Phase I environmental audit of the Premises. As used in this
subsection, a Phase I environmental audit shall be in accordance with the
provisions set forth in 42 U.S.C. 9601 (35)(b) and shall also consist of a
visual inspection of the Premises, including any equipment and machinery thereon
and all building components or materials used therein, an inquiry into past
occupants and uses of the Premises, a search of all records pertaining to
environmental conditions on the Premises, including any reports generated for
or
from any governmental authority, notices of warnings, complaints and violations
of applicable environmental statutes, rules or regulations, and applicable
environmental statutes, rules or regulations, and a visual inspection of all
properties adjoining the Premises and any other investigation deemed consistent
with good commercial practices. If either the investigation or Phase
I environmental audit states that there is no observed contamination or no
potential environmental concerns on site caused by Lessee, then Lessee shall
have no further liability for environmental matters under this
Lease.
(d) As
used herein, the term
“hazardous material” means any hazardous or toxic substance, material or waste
listed in the United States Department of Transportation Hazardous Materials
Table (49 CFR 172.101) or by the United States Environmental Protection Agency
as hazardous substances (40 CFR Part 302) or hazardous wastes (40 CFR Part
261),
petroleum products, asbestos, polychlorinated biphenyls (PCBs), or such other
substances, materials, and wastes that are or become regulated under any
applicable state or local environmental law.
(e) Notwithstanding
anything
in this Lease to the contrary, Lessee shall not be liable for any costs or
expenses caused by any condition unless such condition directly results from
Lessee’s use of, or
9
activities
on, the Premises, or the use of, or activities of Lessee’s agents, customers,
employees, contractors or subcontractors on, the Premises. Nor shall
Lessee be responsible for any contamination discovered on the Premises which
is
not a direct result of Lessee’s use of, or activities on, the
Premises.
Lessee
engaged Xxxxx Engineering & Applied Science, an environmental professional,
who prepared a Phase I environmental audit dated December 2006 with respect
to
the Premises (the “Pre-Commencement Environmental Report”). In order
to assist any environmental professional engaged by either Lessor or Lessee
pursuant to paragraph (c) hereof in the determination of whether the presence
of
hazardous materials in the soil or groundwater on or under the Premises
following the termination of this Lease are a result of Lessee’s use or
activities, or the use or activities of Lessee’s agents or contractors, such
environmental professional may compare the findings of such environmental
professional to the condition of the Premises as described in the
Pre-Commencement Environmental Report. Anything herein to the
contrary notwithstanding, Lessee shall not be liable to Lessor hereunder for
any
environmental hazard cited in the Pre-Commencement Environmental
Report.
(f) Lessor
shall indemnify,
defend and hold Lessee harmless from any and all claims, judgments, damages,
penalties, fines, costs, liabilities, or losses (including, without limitation,
diminution in value of the Premises, damages for the loss or restriction on
use
of rentable or usable space or of any amenity of the Premises and reasonable
sums paid in settlement of claims, reasonable attorney’s fees, reasonable
consultant fees, and reasonable expert fees) which arise during or after the
Lease term as a result of contamination by hazardous material attributable
to
Lessor’s use or activities, or the use or activities of Lessor’s agents or
contractors. This indemnification of Lessee by Lessor includes,
without limitation, costs incurred in connection with any investigation of
site
conditions or any cleanup, remedial, removal, or restoration work required
by
any federal, state, or local government agency or political subdivision because
of hazardous material present in the soil or groundwater on or under the
Premises as a result of Lessor’s use or activities, or Lessor’s agents or
contractors, or which would have with reasonable care exerted by Lessor not
have
occurred. Without limiting the foregoing, if the presence of any
hazardous material on the Premises caused or permitted by Lessor or its agents
or contractors, results in any contamination of the Premises, Lessor shall
promptly take all actions at its sole expense as are necessary to return the
Premises to the condition existing prior to the release by Lessor or its agents
or employees of any such hazardous material on the Premises, provided that
Lessee’s approval of such actions shall first be obtained, which approval shall
not be unreasonably withheld so long as such actions would not potentially
have
any material adverse long-term or short-term effect on the
Premises. The foregoing indemnity shall survive the expiration or
earlier termination of this Lease.
26. PERFORMANCE
OF
INVESTIGATIVE OR REMEDIAL ACTION. The performance of
investigative and/or remedial activity at or near the Premises by any Party
other than Lessee shall be conducted in such a manner as not to cause
unreasonable interference with Lessee’s activity on the
Premises. Should unreasonable interference occur, then appropriate
adjustment to the rent reserved herein shall be made or, if such interference
is
so severe as to deprive the Lessee of use of a significant portion of the
Premises, then this Lease shall terminate after reasonable notice and
opportunity to cure. Lessor shall use its best efforts to provide
Lessee with notification at least seven (7) days prior to the performance of
any
investigation and/or remedial activities at the Premises. Lessor
shall also provide Lessee with copies of any and all communications and/or
documents, which Lessor receives from any federal, state or local governmental
agency or any third Party and pertaining to environmental conditions at the
Premises.
27. TITLE: Within
thirty (30) days following the date of this Lease, Lessor shall deliver to
Lessee a copy of an owner’s policy of title insurance dated within 30 days of
the execution of this Lease, together with a copy of all exceptions to title
noted therein, issued by a title company satisfactory to Lessor and Lessee
insuring Lessor’s fee simple title to the Land. Upon receipt of such
copy, Lessee shall have thirty (30) business days to review and approve the
title to the Land. Lessee shall have the right to
10
terminate
this Lease, immediately upon written notice to Lessor if such title insurance
policy discloses any matter or exception which would materially and adversely
affect Lessee’s use and quiet enjoyment of the Premises for the purposes set
forth in this Lease.
28. AMENDMENT
TO
CONFORM. This Lease shall be amended to conform to any
reasonable requests of Lessor’s lender or lenders so long as such amendment or
amendments do not adversely affect Lessee’s rights pursuant hereto or increase
Lessee’s duties with respect hereto.
29. WAIVER: A
waiver by Lessor or Lessee of any default or breach hereunder shall not be
construed to be a continuing waiver of such default or breach, nor as a waiver
or permission, expressed or implied, of any other or subsequent default or
breach. All waivers must be in writing and no course of conduct shall
establish a custom or confer any rights upon Lessee or Lessor.
30. NOTICES: Unless
otherwise designated by like notice in writing by either party to the other,
notices required herein shall be sent by registered or certified mail or by
express overnight delivery as follows:
To
Lessor:
Agracel, Inc
Attention: R. Xxxx Xxxxxxx
P.O.
Box 1107
0000
Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0
Xxxxxxxxx,
Xxxxxxxx
00000
To
Lessee: Grain Systems,
Inc.
Attention:
Xxxx Xxxxxxxxxx
0000
Xxxx Xxxxxxxx
Xxxxxxxxxx,
Xxxxxxxx 00000
Notices
so mailed or delivered shall be deemed duly given upon deposit with the U.S.
Postal service or overnight courier, as applicable, postage or delivery fee
prepaid, addressed as above indicated.
31. SUCCESSORS: All
of the terms, covenants and conditions of this Lease shall apply and inure
to
the benefit of, and be binding upon the parties hereto, and upon their
respective successors in interest and legal representatives, except as otherwise
provided herein.
32. QUIET
POSSESSION: Lessor covenants with Lessee that Lessee, on
paying the rent herein required to be paid and performing the covenants herein
contained, shall and may peaceably and quietly have, hold and enjoy the Premises
during the term of this Lease.
33. FINANCIAL
INFORMATION: The Lessee is required to provide Lessor annual
financial statements prepared in accordance with generally accepted accounting
principles by April 1st of each
year. The Lessee’s obligation to provide Lessor with such
information shall be fulfilled in every respect upon Lessee filing such
information with the Securities and Exchange Commission, which information
is
then posted on the internet site of the SEC. If no filing takes place, Lessee
will provide annual financial statements.
34. BROKER’S
COMMISSION: Lessor hereby agrees to indemnify and hold
harmless Lessee from the payment of any real estate commission arising out
of
this lease transaction.
11
35. ATTORNEY’S
FEES: If any action at law or in equity shall be brought to
enforce any of the covenants, terms or conditions of this Lease, the prevailing
party shall be entitled to recover from the other party, as part of the
prevailing party’s costs, reasonable attorney’s fees, the amount of which shall
be fixed by the court, and shall be made a part of any judgment or decree
rendered.
36. LEASE
CONSTITUTES ENTIRE CONTRACT: Each party to this Lease
acknowledges that this Lease constitutes all of the agreements between the
parties hereto, and that no representations, warranties, or other covenants
are
included except as set forth herein, and this Lease shall not be recordable,
but
a “Memorandum of Lease” in usual and customary form will be executed and
acknowledged by the parties, upon request of either party, which may be
recorded.
37. EXISTING
LEASES. There are currently three
tenants, other than Lessee, who have leases on parts of the Premises, namely
those leases and tenants identified at Exhibit B (the “Existing
Leases”). Upon execution of this Lease, Lessor shall deliver to
Lessee the following with regard to the Existing Leases:
(a) An
assignment of all of its right, title and interest in those Existing Leases
to
Lessee in the form of Exhibit E.
(b). The
original of the Existing Leases signed by the parties, copies of which are
attached hereto as Exhibit B;
(c) All
policies of insurance or certificates of the same provided to the Lessor by
the
tenants of the Existing Leases;
(d) All
rents from Existing Leases held by Lessor shall be prorated to the Commencement
Date and Lessor shall pay Lessee the amount so determined for the rent
applicable from the Commencement Date;
(e) All
security deposits held by Lessor pursuant to the Existing Leases;
and
(f) Termination
Agreements in the form of Exhibit D signed by the Lessees of the Existing
Leases.
(g) Assignment
by Lessor to Lessee of any and all warranties with regard to the
Building.
In
the
event that Xxxxxxxx Engine Filtration, LLC, fails to vacate the portion of
the
Premises occupied by it pursuant to its lease with Lessor, attached hereto
as
part of Exhibit B, prior to November 1, 2007, then in such event, the monthly
rent due to be paid to Lessor by Lessee shall be reduced by the sum of $25,000
each month commencing with the rent due on November 1, 2007, and continuing
each
month thereafter until Xxxxxxxx Engine Filtration, LLC, vacates the
Premises.
In
addition, the inducement agreements attached hereto as Exhibit C shall have
been
executed by the parties and shall be attached to this Lease.
38. RIGHT
OF FIRST REFUSAL:
(a) Lessor
hereby grants Lessee the right of first refusal to purchase the Premises in
the
event Lessor has a bona fide offer (“Offer”) to purchase the Premises, for the
amount and in accordance with the terms, of any such offer. Lessee
shall have thirty (30) days to exercise this right of first refusal from the
date of receipt of notice from Lessor of the Offer.
12
(b) If
Tenant fails to timely exercise the right of first refusal hereunder, then
the
right of first refusal granted hereunder shall lapse, time being of the essence
with respect to the exercise thereof, and Lessor may sell the Premises pursuant
to the Offer.
39. OPTION
TO PURCHASE:
During
the last year of the Initial Term and during any extensions thereof, Lessee
shall have an option to purchase the Premises at the Option Price as hereinafter
defined. If Lessee desires to exercise the option to purchase, the
Option Price shall be determined by appraisal pursuant to the following
paragraph.
Lessee
shall notify Lessor in writing of the appraiser hired by
Lessee. Lessor shall hire an appraiser within thirty (30) days of
receiving notice from Lessee. Each appraiser shall determine the fair
market value of the Premises and issue their respective
appraisals. “Option Price” means the average of the fair market
values determined by the two appraisals if the difference between the two
appraisals is no more than 5%. If the difference between the two
appraisals is greater than 5%, then the two appraisers shall mutually agree
upon
a third appraiser within thirty (30) days and the Option Price shall be the
fair
market value as determined by the third appraiser but shall not be less than
the
lower of the other two appraisals nor higher than the higher of the other two
appraisals. The cost of the third appraisal shall be shared equally
between Lessor and Lessee. All appraisers selected pursuant to this
paragraph shall be M.A.I. appraisers or M.A.I. equivalent, who are widely
recognized to be knowledgeable and experienced in appraisals of commercial
property similar to the Premises.
Within
thirty (30) days of the final determination of the Option Price, Lessee shall
give written notice to Lessor of Lessee’s election to exercise the option to
purchase. Closing on the purchase of the Premises shall occur within
sixty (60) days of such written election at which time (i) Lessor shall convey
marketable title to the Premises by special warranty deed together with a title
policy insuring such title and (ii) Lessee shall pay the Option Price to Lessor
by wired funds or certified check. Closing costs shall be paid by the
parties as is customary in Christian County, Illinois, with credit given to
Lessee for seller’s portion of the title insurance costs and for real estate
transfer taxes. Each party shall pay one-half of any escrowed closing
fee.
IN
WITNESS WHEREOF,
Lessor and Lessee have executed this Lease or have caused it to be executed
by
their respective authorized representatives the day and year first above
written. Each of the persons executing this Lease represent that they
are authorized to execute the same on behalf of the party for whom they have
executed hereafter.
|
LESSEE
|
LESSOR
|
|
|
GRAIN
SYSTEMS, INC.
|
AGRACEL,
INC.
|
|
|
By:/s/
Xxxx Xxxxxxxxxx
|
By: /s/
R. Xxxx Xxxxxxx
|
|
|
Vice
President Operations
|
President
|
|
|
ATTEST:
|
ATTEST:
|
|
|
By:
/s/ Xxxxx Xxxxxx, Jr.
|
By:
/s/ Xxxxxxx Xxxx
|
|
|
Plant
Manager
|
Secretary
|
13
EXHIBIT
A
Legal
Description
That
part
of the South half of the Southwest Quarter of Section 33, Township 13 North,
Range 2 West of the Third Principal Meridian which lies East of the East
Right-of-Way line of S.B.I. Route 48 and Northwesterly of the Northwesterly
Right-of-Way line of the Norfolk and Western Railroad and North of the Northerly
Right-of-Way line of (F.A. 65) Ill. Route 48 and part of the South 662.22 feet
of the North Half of the Southwest Quarter of said Section 33 which lies East
of
the East Right-of-Way line of S.B.I. Route 48 and Northwesterly of the
Northwesterly Right-of-Way line of the Norfolk and Western Railroad. Said Parcel
described more particularly as follows: Commencing at a disk marking the West
One Quarter corner of the aforementioned Section 33, thence South 01 degrees
02
minutes 25 seconds East along the Section line a distance of 657.15 feet, thence
South 89 degrees 18 minutes 26 seconds East a distance of 42.07 feet to an
Iron
pin on the East Right-of-Way line of S.B.I. Route 48, thence South 01 degrees
00
minutes 32 seconds East along said Right-of-Way line a distance of 562.43 feet
to the true point of beginning, thence South 89 degrees 42 minutes 27 seconds
East a distance of 694.52 feet to a point marking the beginning of a 150.00
foot
radius, tangent curve to the right, thence Southeasterly 229.43 feet along
said
curve whose long chord bears South 45 degrees 53 minutes 25 seconds East for
a
distance of 207.71 feet, thence South 02 degrees 04 minutes 23 seconds East
a
distance of 294.38 feet, thence South 88 degrees 18 minutes 51 seconds East
a
distance of 163.91 feet to an iron pipe on the Northerly Right-of-Way line
of
(FA. Route 65) IL Route 48, said pipe marks the beginning of a 660.00 foot
radius curve to the right, thence Southwesterly 513.95 feet along said Northerly
Right-of-Way line with said curve whose long chord bears South 71 degrees 41
minutes 30 seconds West for a distance of 501.06 feet to an iron pipe, thence
North 86 degrees 00 minutes 00 seconds West along said Northerly Right-of-Way
line a distance of 499.36 feet to an iron pipe, thence North 42 degrees 52
minutes 20 seconds West along said Northerly Right-of-Way line a distance of
51.33 feet to an iron pipe on the East Right-of-Way line of S.B.I. Route 48,
thence North 01 degrees 00 minutes 32 seconds West along said East Right-of-Way
line a distance of 532.16 feet to the true point of beginning. Said parcel
contains 11.441 acres, more or less, all in the County of Christian, State
of
Illinois.
Basis
of
bearing is South 01 degrees 02 minutes 25 seconds East along the Section
line.
Parcel
Identification Numbers: Parts of 17-13-33-301-003; 17-13-33-302-001;
17-13-33-301-004 and 17-13-32-400-012
14
