THIS LEASE AGREEMENT, made this 22nd day of June, 1998, by and
between DIVERSIFIED HOLDINGS XIX, INC., a Nevada corporation, Grantor
herein referred to as "Landlord", whose address is 0000 Xxxx 000 Xxxxx,
Xxxxx 000, Xxxx Xxxx Xxxx, Xxxx 00000, ad T AND S ASSOCIATES, a
Virginia limited partnership, Grantee, herein referred to as "Tenant",
whose address is 000 Xxxxxx Xxxxx Xxxx, Xxxxxxx, Xxxxxxxx 00000.
WITNESSETH:
WHEREAS, Diversified Holdings XIX, Inc., is the sole owner of
the following described real estate, to-wit:
See Schedule A attached (the "Premises")
WHEREAS, T AND S Associates desires to lease the premises for
th purpose of conducting its business as a manufacturer of various
products and commodities, including a soil amendment product
manufactured from certain construction and demolition material;
NOW, THEREFORE, in consideration of the mutual covenants
contained herein the parties hereby agree as follows:
DESCRIPTION OF THE LEASED PREMISES
Landlord agrees to lease and Tenant agrees to rent the
Premises.
TERMS OF LEASE
Tenant agrees to lease the above described premises for a
period of twelve (12) months commencing on the 1st day of August, 1998.
At the end of such twelve month period the lease shall be renewed for
another twelve month period upon the same terms and conditions, unless
thirty (30) days prior to the end of such initial twelve month period,
Tenant delivers to Landlord by certified mail, a written notice of its
intention not to renew its lease.
COMMENCEMENT DATE AND IMPROVEMENTS
Landlord agrees to lease the Premises in substantially the
same condition as exists as of the date of execution of this lease.
Landlord has advised Tenant and Tenant acknowledges that it
has been informed of the current environmental condition of the
premises as set forth in the following reparts:
(a) Level I and II, Environmental Assessments of KMC
Foods, Inc., Cheriton Station, Virginia, for
Northampton County, Project No. 911240, August
30, 1991, prepared by Talbot & Associates, Ltd.;
(b) Site Characterization Report for Former KMC Foods
Plant, Cheriton, Virginia, prepared for: Pemsco
Corporation, prepared by Xxxxx Engineering
Association, P.C. dated October 1, 1993; and
(c) Letter from Xxxxxx X. Xxxxxx, Brownfields Technical
Coordinator, United States Environmental Protection
Agency to Xxxxxx X. Xxxxxx, County Administrator,
dated December 29, 1997, with Report of Xxx X.
Xxxxxx, Inc. dated December 29, 1997 (TDD No.
9712-01).
Tenant may enter upon the Premises and make such repairs,
alterations and improvements as may be appropriate for the conduct of
its business. Any such improvements shall become the Property of
Landlord; provided, however, that any machinery and equipment installed
in or upon the Property shall remain the property of Tenant and may be
removed by Tenant at the conclusion of this lease.
RENT
Tenant agrees to pay to Landlord at 000 Xxxx 000 xxxxx, Xxxxx
000, Xxxx Xxxx Xxxx, Xxxx 00000, the sum of Ten Thousand Dollars
($10,000.00) per month for the lease of the premises, to be due and
payable on the 1st day of each moth beginning on the 1st day of August,
1998. Upon execution of this lease by Landlord, Tenant shall pay to
Landlord the sum of Twenty Thousand Dollars ($20,000) said sum to cover
the first month's rent and the last month's rent to be held as security
for the future performance of the lease terms.
REAL ESTATE TAXES
During the term of this lease, Tenant shall pay all real
estate, personal property and business taxes and assessments imposed on
the demised real estate by the state, county, or other lawful
governmental authority.
USE OF PREMISES
The parties expressly agree that this Lease is executed in
order that Tenant may conduct a manufacturing business or businesses
upon the premises.
SERVICES
During the term of this Lease, Tenant shall be responsible for
providing heat and electricity to the demised premises.
ASSIGNMENT AND SUBLEASE
This Lease may not be assigned or transferred, and the
premises may not be sublet, either in whole or in part, by Tenant
without Landlord's prior written consent, which consent shall not be
unreasonably withheld.
RIGHT OF ENTRY TO REPAIR
Landlord reserves the right for itself, its agents and
employees to enter upon the premises at any reasonable time to make
repairs, alterations, or improvements; provided, however, that such
repairs, alterations, or improvements shall not unreasonably interfere
with Tenant's business operations. Such right to enter shall also
include the right to enter upon the Premises for the purposes of
inspection.
INSURANCE
Tenant shall be responsible for insuring its personal
property. Tenant shall maintain a comprehensive public liability
insurance policy in effect on the Premises and its activities thereon
with limits of not less than One Million Dollars ($1,000,000.00) and
shall cause the Landlord to be named as an additional insured on such
policy. During the term of this lease, Tenant shall also maintain a
fire insurance policy on the premises in the amount of One Million
Dollars ($1,000,000.00).
BANKRUPTCY OR INSOLVENCY
It is expressly agreed that if at any time during the term of
this lease, Tenant shall be adjudged bankrupt or insolvent by any
Federal or State Court of competent jurisdiction, Landlord may, at its
option, declare this lease to be terminated and canceled, and may take
possession of the demised premises. In the event of the such bankruptcy
or insolvency of the Landlord, or in the event the premises are sold,
Tenant may elect to terminate this lease, but it will not be required
to do so.
DAMAGE OR DESTRUCTION BY FIRE OR NATURAL CAUSES
If, during the term of this lease, any of the buildings on the
demised premises which are in use by Tenant are destroyed by fire,
natural causes, or other casualty, or so damaged thereby that they
cannot be repaired with reasonable diligence within sixty (60) days,
this lease may be terminated by Tenant as of the date of such damage or
destruction. However, if said buildings can with reasonable diligence
be repaired within sixty (60) days, said buildings shall be, by
Landlord, repaired as quickly as is reasonably possible, and this lease
shall remain in full force and effect; provided, however, rent shall be
abated for any part of said building which is rendered unfit for
occupancy for the period that such unfitness continues.
SIGNS
Tenant may display signs and shingles advertising its place of
business without the prior consent of the Landlord.
OPTION TO PURCHASE
In further consideration of the sum of One Dollar ($1.00) cash
in hand paid, the receipt and sufficiency of which is hereby
acknowledged by Landlord, Landlord hereby rants to Tenant, its
successors and assigns, the exclusive option to purchase the Premises
upon the following terms and conditions:
(a) The purchase price for the Premises is Seven Hundred
Thousand Dollars ($700,000.00), to which all rental
payments shall be applied. Teh balance shall be paid
in cash at closing.
(b) This option may be exercised at any time from the
date of this lease until 5:00 P.M. on the 31st day of
July 2000, by written notice sent by certified mail,
return receipt requested, to Landlord at 000 Xxxx 000
Xxxxx, Xxxxx 000, Xxxx Xxxx Xxxx, Xxxx 00000. Tenant
shall not be in default under the terms and
provisions of the Lease at the time the option is
exercised. In the event of exercise of the option,
then the lease shall continue in full force and
effect until closing.
(c) In further consideration for the sum paid for this
option, the owners, herein designated as Landlord,
shall not sell, convey, or further encumber the
Premises during the period of the option without
Tenant's prior written consent; however, this shall
not effect the Landlord's right and ability, without
Tenant's consent, to refinance existing debt so long
as the amount of the new debt does not exceed eighty
(80) percent of the amount of the purchase price,
reduced by payments made thereon.
(d) delivery of the deed and the balance of the purchase
price and the possession of the Premises will take
place within ten (10) days of all contingencies in
the Lease being fulfilled; provided, however, that
the closing shall take place no later than the 1st
day of September, 2000, with settlement at the law
offices of the Tenant's attorney in Northampton
County, Virginia. Possession, free and clear of all
leases and licenses, shall be given at closing,
unless otherwise agreed in writing by the parties.
Real estate taxes, and all other assessments against
the real estate shall be prorated between the
Landlord and the Tenant as of the closing date.
(e) At Settlement, Landlord shall convey to Tenant good
and marketable fee simple title to the Premises by
deed of General Warranty containing
English Covenants of Title, free of all liens,
defects, tenancies, encumbrances and encroachments,
except as otherwise indicated herein, and subject
only to such restrictions and easements as shall then
be of record which do not affect the use of the
Premises for Tenant';s intended use or render the
title unmarketable. If a defect is found which can be
remedied by legal action within a reasonable time,
Landlord shall, at Landlord's expense, promptly take
such action as is necessary to cure the defect. If
Landlord, acting in good faith, is unable to have
such defect corrected within sixty (60) days after
notice of such defect is given to Landlord, then this
Lease may be terminated by Tenant at the expiration
of such sixty (60) day period. Tenant may extend the
date for Settlement to the extent necessary for
Landlord to comply with this paragraph.
Landlord agrees to pay the expense of preparing the
deed, certificates of nonforeign status and Form
1099-S and the recordation tax applicable to
grantors. Landlord shall pay when due all sums due to
realtor(s) employed by Landlord in connection with
the sale of the Premises.
Except as otherwise agreed herein, all other expenses
incurred by Tenant in connection with this purchase,
including without limitation, surveys, title
examination, insurance premiums, recording costs,
loan document preparation costs, and fees of Tenant's
attorney, shall be borne by Tenant.
(f) Landlord warrants that Landlord is the fee simple
owner of the Premises and has all necessary authority
to sell the Premises. There are no other Leases for
sale of options involving the Premises, and no other
pary has any right, title of interest in the
Premises.
Landlord warrants that there are no eminent domain or
condemnation proceedings pending against the
Premises, and Landlord has o knowledge of such
proceedings or of any intentions or plans definite or
tentative that such proceedings might be instituted.
Landlord warrants that there are no actions or suits
in law or equity or proceedings by any governmental
agency now pending or, to the knowledge of Landlord,
threatened against Landlord in connection with the
Premises. In addition, Landlord warrants that there
is no outstanding order, writ, injunction or decree
of any court or governmental agency affecting the
Premises.
Landlord warrants that there has bot been made and
will not be made, without Tenant's consent, any
proffers or other commitments to any stat, county,
federal or local governmental or quasi-governmental
authority, utility or service company, or any public
or private organization or individual relating to the
Premises, which would impose any obligation on
Tenant, or its assigns, after Settlement, to make any
contributions of money or dedications of land, or to
construct, install or maintain any improvements of a
public or private nature on or off the Premises.
Landlord warrants that it has not received any notice
from any governmental or private agency with regard
to the necessity of remediating the Premises because
of the existence of an Hazardous Materials, toxic
chemicals or similar substances. This paragraph shall
survive closing and shall not merge with the Deed;
except as disclosed under section "Commencement Date
and Improvements", subsections (a) - (k).
Landlord warrants that Landlord know of no materially
adverse fact affecting or threatening to affect the
Premises which has not been disclosed to Tenant in
writing.
The representations and warranties of Landlord set
forth in this Agreement shall be true and correct on
and as of the Closing Date as though such
representations and warranties were made on and as of
that date. Notwithstanding that certain of Landlords
representations and warranties may be limited to the
extent of actual knowledge by Landlord and/or
Landlord's agents of the facts stated therein, it
shall be a condition precedent to Tenant's obligation
to go to settlement that the facts stated in all such
representations and warranties shall be correct as of
teh time of the closing.
(g) Landlord warrants and represents to Tenant the
following matters and agrees to indemnify, defend,
and hold harmless the Tenant from any loss or
liability therefrom;
(i) Landlord has not received any
notices issued by any municipal or
other public authority with regard
to any work or improvements done or
ordered by such authority to be done
either before or after the date of
this Lease. The Landlord has no
reason to believe that any such
notice will be issued between the
date hereof and the closing date.
(ii) Landlord is the sole holder of legal
title to the Premises in fee simple
and the Premises is not subject to
any outstanding lease or to any
other estate or to any outstanding
option, lease, or agreement of sale.
Landlord has the full power and
authority to execute, deliver, and
perform under this Lease and all
agreements and documents referred to
herein.
(iii) There is no condemnation proceeding
pending with regard
to any portion of the Premises and
the Landlord does not know of or
have reason to know of any proposed
condemnation proceedings with regard
to any protion of the Premises.
(iv) To the best of Landlord's knowledge
and belief, the Premises in not
subject to any "Superfund" or
similar lien or any claim by any
government regulatory agency or
third party relating to the release
or threatened release of any
hazardous or toxic substance,
material, or waste.
CONTINGENCIES
This Lease is contingent upon the following:
1. No restrictions on the real estate prohibiting
Tenant's aforesaid use of the real estate for the
manufacturing or certain commodities by Tenant.
2. No existing easements, covenants, restrictions or
rights in the real estate prohibiting or interfering
with Tenant's aforesaid intended use of the real
estate.
3. Tenant obtaining from Northampton County approval for
the use of the Premises as aforesaid.
Landlord agrees to cooperate with Tenant on any
applications required to obtain the Northampton County
approval outlined above, but all costs of same shall be the
Tenant's sole responsibility. Landlord shall sign any
applications and such other documents as may be necessary for
the successful approval of the subject real estate for its
intended use as outlined above.
Tenant may void this Lease if any one or more of the
above contingencies and/or conditions set forth herein are not
fulfilled to Tenant's satisfaction. If voided by Tenant due to
the failure of any contingency, and deposits shall be returned
to the Tenant.
Prior to the closing, the Tenant and Tenant's
designated agents and employees shall have full access to the
Premises for the purpose of making engineering, topographical
and such additional studies as Tenant deems appropriate.
Tenant shall not undertake any studies which damage the
Prmises.
Landlord agrees to provide to Tenant, at no cost,
within five (5) days after Landlord's acceptance of this
Lease, any surveys, environmental assessment information, soil
studies, and other agreements affecting the Premises.
BINDING EFFECT
The parties, having read and understood the
provisions of this lease, agree for themselves, their hers,
administrators, personal representatives, executors, and
assigns to be bound thereby.
In Witness Whereof, the parties have executed this
lease on the ___ day of ______________ , 1998.
DIVERSIFIED HOLDINGS XIX, INC.
By: /s/ Xxxxxxx Xxxxxx
Its: President
T AND S ASSOCIATES
By: G.Xxxxxxx Xxxxxxxxx, Xx.
Its: General Partner
