COMMERCIAL LEASE
Exhibit
10.14
This
lease is entered into between JAM SUMMER PROPERTIES, LLC (“Landlord”) and
Magnetech Industrial Services, Inc. (“Tenant”).
1. Agreement
to Lease.
Landlord is the owner of real estate and improvements located at 0000 Xxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxx, the legal description of which is attached as Exhibit
“A” (“Real Estate”). Subject to all the provisions of this Lease, Landlord
leases to Tenant and Tenant leases from Landlord a portion of the Real Estate
as
shown on the drawing attached as Exhibit “B” (“Property”). Xxxxx Electric
Company (“Xxxxx Electric”) currently rents the remaining portion of the Real
Estate from Landlord in accordance with a month-to-month lease dated August
3,
2001 (“Xxxxx Lease”). Even though Xxxxx Electric rents a portion of the Real
Estate, Tenant shall be responsible for expenses on the entire Real Estate,
such
as taxes, utilities, etc. as provided in this Lease.
2. Term.
This
Lease shall be for an initial term of nine (9) years beginning on August
3,
2001, (“Lease Commencement Date”) through August 3, 2010 (“Lease Termination
Date”).
3. Use.
Tenant
shall use the Property for the operation of its business and any related
purpose.
4. Rent.
As rent
for use of the Property, Tenant agrees to pay the following:
Lease
Years
|
Rent
|
||
1st
through 3rd years
|
$8,500.
per month
|
||
4th
through 6th
years
|
$8,925.
per month
|
||
7th
through 9th
years
|
$9,371.
per month
|
If
the
Xxxxx Lease is terminated during the first year of this Lease (“First Year”),
Tenant’s rental payments shall be reduced to Five Thousand Dollars ($5,000) per
month for the remainder of the First Year; provided however, that
1
Tenant’s
rent shall return to Eight Thousand Five Hundred Dollars ($8,500) per month
on
the earlier of: i) the completion of the First Year; or ii) the date upon
which
the portion of the Real Estate formerly rented by Xxxxx Electric is occupied
by
a new tenant.
The
first
payment of rent shall be due on the Lease Commencement Date with subsequent
payments due on the same day of each consecutive month thereafter. Payments
shall be made to Landlord at 0000 X. Xxxxxx Xxxxxx, Xxxxx Xxxx, Xxxxxxx 00000,
or any other place Landlord may from time to time designate in
writing.
If
Tenant
fails to pay any rent, expenses or other charges required under this Lease
within five (5) days after the due date, then any unpaid amounts shall be
subject to a late charge of two percent (2%) interest per month from the
due
date to the date of payment, which percentage rate is an annual rate of
twenty-four percent (24%). Notwithstanding this interest charge, nonpayment
of
any such amounts due under this Lease shall constitute a default.
5. Additional
Expenses.
a. Utilities.
All
utility bills, including water, sewerage, gas, electricity, telephone and
similar services on the Real Estate shall be paid by Tenant. Tenant shall
not
install any equipment which shall exceed the capacity of any utility facilities
furnished by Landlord. If any equipment desired by Tenant requires additional
utility facilities, the same shall be installed at Tenant’s expense in
compliance with all applicable code requirements and with Landlord’s prior
written approval. Further, Landlord shall not be liable to Tenant in damages
or
otherwise for any utilities or services, whether or not furnished by Landlord
hereunder, which are interrupted or terminated for any reason, including
repairs, installations, improvements, energy emergency or shortage.
b. Taxes
and Assessments.
Tenant
shall pay all real estate taxes (“Taxes”), assessments and any other
governmental charges (“Assessments”) on the Real Estate as they come due during
the term of the Lease. Tenant shall pay Taxes to Landlord in two (2) equal
installments on or before May 10 and November 10 of
2
each
year
during the term of this Lease. Tenant shall pay Assessments to Landlord at
least
ten (10) days before the Assessments are due and payable. Landlord agrees
to
furnish Tenant with copies of official statements from the County Treasurer
or
other taxing authority on or before each April 15 and October 15 reflecting
the
Taxes and/or Assessments due on the Real Estate.
c. Maintenance.
Tenant
shall at all times maintain the complete Real Estate in good working order
and
repair, including but not limited to the foundations, roof and other structural
portions of the Real Estate. All entrances, vestibules, partitions, windows,
window frames and moldings, door openers, fixtures, equipment, and appurtenances
thereof, as well as lighting, heating, electrical, plumbing, ventilation,
air
conditioning and similar systems (whether installed by Landlord or Tenant).
Tenant shall keep the Real Estate in a clean, orderly, and safe manner. Tenant
covenants that the Real Estate shall at all times comply with all ordinances,
governmental regulations and applicable laws. If replacement of any aforesaid
equipment, fixtures or appurtenances becomes necessary, Tenant shall replace
the
same with equipment, fixtures and appurtenances of the same size and quality
and
shall promptly repair any and all damage done by such replacement. If Tenant
fails to perform these obligations, Landlord without notice may, but shall
not
be obligated to, perform such obligations and add the cost to the next
installment of rent due. At the expiration of this Lease or any extension
thereof, Tenant shall return the Real Estate to Landlord in its Original
Condition, reasonable wear and tear excepted. Tenant shall pay for all repairs
and Real Estate upkeep, including window and glass replacement, snow removal,
trash removal, lawn care and similar expenses.
6. Insurance.
a. Fire
Insurance. Tenant
at
its sole cost and expense shall keep the building or buildings and improvements
on the Real Estate insured under a policy with extended coverage endorsements
for not less than its full or their full replacement value. Tenant shall
be
responsible for insurance covering Tenant’s personal property. Tenant shall also
obtain business interruption insurance if
3
Tenant
wishes to be protected from this risk since it is understood the Landlord
shall
not be responsible for any loss to Tenant caused by fire (regardless of who
is
negligent). Tenant agrees not to keep or use anything on the Property which
is
prohibited by the standard policy form of fire insurance.
b. Public
Liability Insurance. At
Tenant’s expense, Tenant shall procure comprehensive and general public
liability insurance against claims for personal injury, death or property
damage
occurring in, or about the Property, such insurance to afford protection
to the
limit of not less than One Million Dollars ($1,000,000.) in respect to injury
or
death of a single person, Five Million Dollars ($5,000,000.) in respect to
any
one accident and Five Hundred Thousand Dollars ($500,000.) in respect to
property damage.
c. General
Requirements. The
insurance policies required to be obtained by Tenant shall name Tenant as
the
insured and the Landlord (and any mortgagee as additional insureds. These
insurance policies shall be issued by insurers authorized to do business
in the
State of Indiana. These policies shall provide that they not be cancelled
without at least ten (10) days prior written notice to both Landlord and
Tenant
and further that any losses shall be payable notwithstanding any act or
negligence of Tenant or Landlord which might otherwise result in forfeiture
of
the insurance.
Upon
commencement of the term of this Lease and thereafter not less than fifteen
(15)
days prior to the expiration date of each expiring policy, a certificate
evidencing the insurance policies issued by each insurer shall be delivered
to
Landlord, together with satisfactory evidence of payment of all required
premiums.
7. Acceptance
of Premises.
By
occupying the premises, Tenant acknowledges that the Property has been examined
and is in good order and repair (“Original Condition”). Tenant acknowledges that
no representations as to the condition of repair have been made by Landlord.
8. Alterations.
Tenant
shall make no structural changes alterations, additions, or improvements,
or do
any such work on or about the Property without the prior written consent
of the
Landlord. All structural changes or alterations
4
shall
become a part of the Property and remain thereon as Landlord’s property at the
termination of the Lease. However, Landlord hereby consents to and gives
Tenant
the right to install or provide such trade fixtures, partitions and equipment,
together with any additional painting or decorative, nonstructural alterations,
which Tenant may find necessary or desirable for operation of its business.
It
is further agreed that all such trade fixtures, partitions and equipment
installed by Tenant (“Trade Fixtures”), regardless of the manner of their
annexation, may be removed by Tenant at the termination of this
Lease.
All
changes, whether structural or nonstructural, shall be made at Tenant’s own
expense. Restoration of the Property to its Original Condition (including
damage
caused by removal of the Trade Fixtures) also shall be made at Tenant’s expense.
Tenant shall promptly pay for all materials and labor involved in making
such
changes or restoration and shall not permit any liens, claims or demands
(“Claim”) to exist against the Landlord or the Property. If a Claim is filed or
made against the Landlord or the Property, Tenant shall defend the same at
its
own expense and indemnify and hold Landlord harmless from all liability and
expenses arising by virtue of the Claim (unless the Claim arose because of
the
fault of the Landlord).
9. Assignment
and Subletting.
Tenant
shall not assign, pledge, mortgage, or otherwise encumber either this Lease
or
the Property. Tenant shall not sublet all or any part of the Property without
the Landlord’s prior written consent. However, no permitted subletting shall
relieve Tenant of Tenant’s obligations under this Lease. Tenant shall continue
to be liable as a principal and not as a guarantor or surety to the same
extent
as though no subletting had been made.
10. Casualty
Loss. If the Property is damaged or destroyed by fire or other casualty which
renders it untenantable, Landlord may elect to either terminate the Lease
or
restore the Property to its former condition within one hundred twenty (120)
days after such casualty. Landlord shall give written notice of such election
to
Tenant within thirty (30) days after the casualty; if such notice is not
given,
the
5
Lease
shall terminate. If Landlord does not restore the Property, rent shall be
paid
at the agreed rate only up to and including the date of such casualty. If
Landlord repairs the Property, the rent shall xxxxx until the Property is
again
tenantable. If the Property suffers only partial damage or destruction, Landlord
shall repair the damage within a reasonable time and shall xxxxx Tenant’s rent
in proportion to the amount of the untenantable Property.
11. Default
of Tenant.
Failure
of Tenant to perform any requirements under this Lease within thirty (30)
days
after written notice of default is received from Landlord, except Tenant’s
failure to make rental payments for which no written notice of default is
required from Landlord, shall be considered a default by Tenant under this
Lease.
12. Remedies
of Landlord. If
Tenant
defaults in payment of rent, expenses or any other agreements contained in
this
Lease, Tenant will at once deliver peaceable possession of the Property to
Landlord.
13. Signs.
The
Tenant may install appropriate signs on the Property. At the termination
of this
Lease, such signs shall be removed at Tenant’s expense. Any damage to the
Property caused by the erection, maintenance or removal of such signs shall
be
paid for by the Tenant.
14. Environmental
Representations. Tenant
shall not use, or permit the Property to be used, in a manner that violates
any
applicable federal, state or local law, regulation or ordinance now or hereafter
in force. This includes, but is not limited to, any law, regulation or ordinance
pertaining to air or water quality or emissions; the handling, transportation,
storage, treatment, usage or disposal of toxic or hazardous substances; or
any
other environmental matters. Compliance shall be at the sole cost and expense
of
Tenant, its agents, employee, contractors or invitees.
Tenant
shall immediately notify the Landlord of any spills, releases or other potential
failures to comply with applicable environmental laws and regulations, and
of
any inspections, notices, orders, fines or communications originating from
environmental regulatory agencies.
6
Landlord,
its officers, employees, contractors or agents shall have the right but not
the
duty to inspect the premises, including Ternant’s records pertaining to
environmental compliance, and conduct any sampling or tests necessary to
verify
Tenant’s compliance with applicable environmental law or regulations and this
Lease. If Tenant is found to be in violation of this Lease or any applicable
law
or regulation, or if environmental contamination is detected, Tenant shall
be
responsible for all costs associated with such contamination or
noncompliance.
Tenant
agrees to indemnify, defend and hold Landlord and its officers, directors,
employees, contractors and agents harmless from all costs or liabilities
arising
from any environmental contamination or noncompliance with any applicable
federal, state or local environmental law, regulation or ordinance now or
hereafter in force, resulting from the operations of the Tenant, its agents,
employees, contractors or invitees.
This
indemnification includes, without limitation, all claims, judgments, damages
(including natural resource damages), penalties, fines and costs incurred
in
connection with any site investigation to determine the presence or extent
of
any contamination, as well as the costs of any cleanup, removal or remedial
work, whether or not it is required by any regulatory agency. Such costs
shall
include reasonable environmental consultant’s and attorney fees.
This
indemnification shall survive the expiration or earlier termination of this
Lease.
15. Liability
and Indemnification. Landlord
shall not be liable to Tenant for any damage or injury to Tenant or Tenant’s
property arising out of or in any way related to the condition of the Property.
Tenant shall indemnify and hold Landlord harmless against all liabilities,
losses, claims, costs, expenses and judgments of any nature arising from
or in
connection with injuries to persons or damage to property arising from or
connected with Tenant’s use of the Property.
16. Holding
Over. At
the
termination of this Lease, by lapse of time or otherwise, Tenant will yield
up
immediate possession to Landlord.
7
17. Option
to Renew.
Provided this Lease is in effect and Tenant is not in default, Tenant shall
have
the right and option to renew this Lease for additional terms of three (3)
years
each under the same provisions as the original Lease, except for rental
payments. To be effective, the option to renew must be exercised by Tenant
by
notice delivered to Landlord or mailed to Landlord by certified mail, postage
prepaid and return receipt requested at least four months prior to the beginning
date of the renewal term.
For
each
option renewal term, Tenant agrees to pay as rent for the Property an increase
in monthly installments equal to five percent (5%) rounded to the nearest
dollar. For example, for the first renewal term, Tenant would pay as rent
for
the Property equal monthly installments of NINE THOUSAND EIGHT HUNDRED FORTY
DOLLARS ($9,840.00) each; the monthly rent for the second renewal term would
be
TEN THOUSAND THREE HUNDRED THIRTY-TWO DOLLARS ($10,332.00) per
month.
18. Miscellaneous.
a. Quiet
Enjoyment.
So long
as Tenant performs and observes all the provisions of this Lease, Landlord
covenants and promises that Tenant shall have peaceful enjoyment of the
Property.
b. Notice.
Notice
from one party to another relating to this Lease shall be deemed effective
if
made in writing (including telecommunications) and delivered to the recipient’s
address, telex number or facsimile number set forth under its name by any
of the
following means: (a) hand delivery, (b) registered or certified mail, postage
prepaid, with return receipt requested, (c) first class or express mail,
postage
prepaid, (d) Federal Express or like overnight courier service or (e) facsimile,
telex or other wire transmission with request for assurance of receipt in
a
manner typical with respect to communications of that type. Notice made in
accordance with this section shall be deemed delivered on receipt if delivered
by hand or wire transmission, on the third business day after mailing if
mailed
by first class, registered or certified mail, or on the next business day
after
8
mailing
or deposit with an overnight courier service if delivered by express mail
or
overnight courier. The current address of the parties is as
follows:
Landlord
|
Tenant
|
|
JAMSUMMER
PROPERTIES, LLC
|
Magnetech
Industrial Services, Inc.
|
|
0000
X. Xxxxxx Xxxxxx
|
000
Xxx Xxxx
|
|
Xxxxx
Xxxx, XX 00000
|
Xxxxxxxx,
XX 00000
|
|
Fax:
000-000-0000
|
Fax:
000- 000-0000
|
c. Entry
and Inspection.
Landlord shall have the right to enter and inspect the Property at reasonable
times.
d. Attorney
Fees.
Tenant
shall pay all reasonable costs, attorney and paralegal fees and expenses
that
may be incurred by Landlord in the enforcement of the terms of this Lease
including any expenses incurred on appeal.
e. Severability.
If any
provision of this Lease becomes invalid or unenforceable, the remainder of
the
Lease shall not be affected and the balance of the Lease provisions shall
be
valid and enforceable to the fullest extent permitted by law.
f. Successors.
The
provisions of this Lease shall be binding upon the successors in interest
of
both Landlord and Tenant.
g. Headings.
The
paragraph headings contained in this Lease are for reference purposes only
and
shall not affect in any way the meaning or interpretation of this
Lease.
h. Counterparts.
This
Lease may be executed simultaneously in two or more counterparts, each of
which
shall be deemed an original, but all of which together shall constitute one
and
the same instrument.
i. Entire
Agreement.
This
Lease (including the exhibits hereto) is intended by the parties to and does
constitute the entire agreement of the parties with respect to the rental
of the
Property. This Lease supersedes any and all prior understandings, written
or
oral, between the parties hereto.
9
Landlord
and Tenant now sign this Lease to be effective the 5th
day of
March, 2003.
LANDLORD
|
TENANT
|
|
JAM
SUMMER PROPERTIES, LLC
|
MAGNETECH
INDUSTRIAL SERVICES, INC.
|
|
/s/ Xxxx X. Xxxxxxx | /s/ Xxxx X. Xxxxxxx | |
By:
Xxxx X. Xxxxxxx, Member
|
By:
Xxxx X. Xxxxxxx, President
|
10
EXHIBIT
“A”
PARCEL
1:
Part of the North ½ of the Northeast ¼ of the Southwest ¼ of Section 5, Township
36 North, Range 9 West of the 2nd
Principal Meridian, in Lake County, Indiana, described as beginning at the
point
of intersection of the North line of said Northeast ¼ of the Southwest ¼ with
the Northeasterly line of Summer Street and running thence Southeasterly
along
the North line of Summer Street a distance of 360.00 feet; thence Northeasterly
perpendicular to the North line of Summer Street a distance of 242.21 feet
to
the North line of said Northeast ¼ of the Southwest ¼; thence West a distance of
433.91 feet to the place of beginning, excepting therefrom the following:
Beginning at the point of Intersection of the North line of said Northeast
¼ of
the Southwest ¼ with the Northeasterly line of Summer Street and running thence
Southeasterly along the Northeasterly line of Summer Street a distance of
129.73
feet; thence Northeasterly perpendicular to the Northeasterly line of Summer
Street a distance of 87.28 feet to the North line of said Northeast ¼ of the
Southwest ¼; thence West 156.36 feet to the point of beginning, in the City of
Xxxxxxx, Lake County, Indiana.
PARCEL
2:
Part of the North ½ of the Northeast ¼ of the Southwest ¼ of Section 5, Township
36 North, Range 9 West of the 2nd
Principal Meridian, in the City of Xxxxxxx, Lake County, Indiana, more
particularly described as follows, to wit: Beginning at the point of
intersection of the North line thereof, with the Northeasterly line of Summer
Street; thence Southeasterly along the Northeasterly line of Summer Street
360
feet for a point of beginning; thence Southeasterly along the Northeasterly
line
of said Summer Street 149 feet; thence Northeasterly perpendicular to the
Northeasterly line of said Summer Street 342.23 feet, more or less, to a
point
on the North line of the Southwest ¼ of said Section 5, said point being 613.50
feet, more or less, East of the intersection of the Northeasterly line of
Summer
Street with the North line of said Southwest ¼; thence West along the said North
line 179.59 feet, more or less, to a point, said point being 433.91 feet
East of
the Northeasterly intersection line of Summer Street and the North line of
said
Southwest ¼ of Section 5; thence Southwesterly 242.21 feet to the point of
beginning.
PARCEL
3:
Part of the Southeast ¼ of the Northwest ¼ of Section 5, Township 36 North,
Range 9 West of the 2nd
Principal Meridian, more particularly described as follows: Commencing at
the
point of intersection of the South line of said Southeast ¼ of the Northwest ¼
with the Northeasterly line of Summer Street and running thence East along
the
South line of said Southeast ¼ of the Northwest ¼ a distance of 156.36 feet to
the point of beginning; thence Northeasterly at an angle of 56 degrees 04
minutes measured from East to North, with the South line of said Southeast
¼ of
the Northwest ¼ a distance of 156.72 feet; thence Southeasterly at an angle of
90 degrees with the last described line a distance of 232.93 feet to the
South
line of the Southeast ¼ of the Northwest 1/4; thence West a distance of 280.75
feet to the point of beginning, in the City of Xxxxxxx, Lake County,
Indiana.
11
PARCEL
4:
That part of the South ½ of the Northwest ¼ of Section 5, Township 36 North,
Range 9 West of the 2nd
Principal Meridian, being more particularly described as follows: Commencing
at
a point of intersection of the Northeasterly line of Summer Street and the
South
line of the South ½ of the Northwest ¼ of said Section 5; thence Southeasterly
along the Northeasterly line of Summer Street, a distance of 129.73 feet;
thence
Northeasterly perpendicular to the Northeasterly line of Summer Street, a
distance of 244.0 feet to the point of beginning; thence continuing
Northeasterly along aforesaid line a distance of 98.46 feet; thence
Southeasterly at right angles with the last described line a distance of
379.27
feet to a point on the South line of the South ½ of the Northwest ¼ of said
Section 5, which point lies 613.48 feet East of the intersection of the
Northeasterly line of Summer Street and the South line of the South ½ of the
Northwest ¼ of said Section 5; thence Westerly along the aforesaid South line a
distance of 176.37 feet; thence Northwesterly parallel with the Northeasterly
line of Summer Street, a distance of 232.93 feet to the point of beginning,
all
in the City of Xxxxxxx, Lake County, Indiana.
12
Exhibit
“B”
Drawing
of Property
13
AMENDMENT
TO COMMERCIAL LEASE
This
lease amendment is entered into between JAM SUMMER PROPERTIES, LLC (“Landlord”)
and Magnetech Industrial Services, Inc. (“Tenant”).
Landlord
agrees to amend rate of rent to $7,500.00 per month until notified by Landlord
that there will be a rate increase.
Landlord
and Tenant now sign this Lease to be effective the 3rd
day of
August, 2001.
LANDLORD
|
TENANT
|
|
JAM
SUMMER PROPERTIES, LLC
|
MAGNETECH
INDUSTRIAL SERVICES, INC.
|
|
Xxxx X. Xxxxxxx | Xxxx X. Xxxxxxx | |
By:
Xxxx X. Xxxxxxx, Member
|
By:
Xxxx X. Xxxxxxx, President
|