Exhibit 10.7
AMENDED AND RESTATED LEASE
by and between
KLEARFOLD, INC.,
as Tenant
AND
XXXXXX X. XXXXXX,
as Landlord
June 7, 1996
(i)
SECTION 1. Reference Information................................... 1
Section 1.1. Reference Information............................. 1
Section 1.2. Exhibit........................................... 2
SECTION 2 Premises and Term........................................ 2
Section 2.1. Premises.......................................... 2
Section 2.2. Term.............................................. 2
Section 2.3. Option to Extend Term............................. 2
SECTION 3 Condition of Premises.................................... 3
Section 3.1. Condition of Premises............................. 3
SECTION4 Fixed Rent................................................ 3
Section 4.1. The Fixed Rent.................................... 3
Section 4.2 Producer Price Index Rate.......................... 3
SECTION 5 Real Estate and Other Taxes.............................. 4
Section 5.1. Real Estate Taxes................................. 4
SECTION 6 Insurance................................................ 5
Section 6.1. Tenant's Insurance................................ 5
Section 6.2. Requirements Applicable to Insurance Policies..... 6
Section 6.3. Waiver of Subrogation............................. 6
SECTION 7 Utilities................................................ 7
Section 7.1. Utilities......................................... 7
SECTION 8 Tenant's Covenants....................................... 7
Section 8.1. Repair and Maintenance............................ 7
Section 8.2. Use............................................... 7
Section 8.3. Compliance with Law and Insurance
Requirements...................................... 7
Section 8.4. Tenant's Work..................................... 8
Section 8.5. Indemnity......................................... 9
Section 8.6. Landlord's Right to Enter......................... 9
Section 8.7. Personal Property at Tenant's Risk................ 9
Section 8.8. Payment of Landlord's Cost of Enforcement.........10
Section 8.9. Yield up..........................................10
Section 8.10. Estoppel Certificate.............................10
Section 8.11. Holding Over.....................................11
Section 8.12. Assignment and Subletting........................11
Section 8.13. Overloading and Nuisance.........................12
Section 8.14. Signs............................................12
SECTION 9 Casualty or Taking.......................................12
Section 9.1. Termination......................................12
Section 9.2. Restoration......................................13
SECTION 10 Default.................................................14
Section 10.1. Events of Default................................14
Section 10.2. Remedies.........................................14
Section 10.3. Remedies Cumulative..............................15
Section 10.4. Landlord's Right to Cure Defaults................15
(ii)
Section 10.5. Effect of Waivers of Default...................15
Section 10.6. No Accord and Satisfaction.....................16
Section 10.7. Interest on Overdue Sums.......................16
SECTION 11 Superiority of Lease; Option to Subordinate.............16
Section 11.1. Superiority of Lease; Option to Subordinate....16
SECTION 12 Miscellaneous Provisions................................17
Section 12.1. Notices from One Party to the Other............17
Section 12.2. Quiet Enjoyment................................17
Section 12.3. Lease Not to Be Recorded; Notice of Lease......17
Section 12.4. Bind and Inure.................................17
Section 12.5. Acts of God....................................18
Section 12.6. Landlord's Default.............................18
Section 12.7. Permitted Contests.............................18
Section 12.8. Miscellaneous..................................18
-1-
AMENDED AND RESTATED LEASE
This Amended and Restated Lease amends and restates that certain Lease
Agreement between Tenant and Landlord dated July 1, 1985, as modified by letter
agreement dated December 15, 1994.
SECTION 1. Reference Information
Section 1.1. Reference Information. Reference in this Lease to any of
the following shall have the meaning set forth below:
Date of This Lease: June __, 1996
Premises: The ________ acre lot (the "Lot") described on Exhibit A attached
hereto, together with the building and other improvements therein (the
"Building"), situated at 000 Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxxx.
Landlord: Xxxxxx X. Xxxxxx
Address of Landlord: Xxxxx 000, 000 Xxxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxx
00000
Tenant: Klearfold, Inc., a Pennsylvania corporation
Address of Tenant: 000 Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Term Commencement Date: June 7, 1996
Term Expiration Date: Xxxxxxxx 00, 0000
Xxxxxxxxx Xxxx: One five-year additional term from January 1, 2006 to
December 31, 2010
Annual Fixed Rental Rate:
From Commencement Date $336,203.88
to December 31, 2000 (i.e., $28,016.99 per month)
-2-
From January 1, 2001 to Annual Fixed Rental Rate calculated
December 31, 2005 pursuant to Section 4.2, as of the
commencement of each calendar year.
During Extension Term Annual Fixed Rental Rate calculated
pursuant to Section 4.2, as of the
commencement of each calendar year.
Fixed Rental: The annual fixed rent calculated in accordance with the
Annual Fixed Rental Rate.
Permitted Uses: Tenant's manufacturing operations, office space,
warehousing of inventory and related uses.
Liability Insurance Limit:
Bodily Injury Combined single per occurrence limit
and Property of $2,000,000 for bodily injury and
Damage: property damage
Section 1.2. Exhibit. The following Exhibit is attached to and
incorporated in this Lease:
Exhibit A: Description of Lot
SECTION 2 Premises and Term
Section 2.1. Premises. Landlord hereby leases and demises the
Premises to Tenant and Tenant hereby leases the Premises from Landlord, subject
to the terms and provisions of this Lease.
Section 2.2. Term. TO HAVE AND TO HOLD for an original term beginning
on the Term Commencement Date and continuing until the Term Expiration Date,
unless sooner terminated as hereinafter provided.
Section 2.3. Option to Extend Term. Tenant shall have the option to
extend the term of this Lease for the Extension Term as to the Premises,
provided Tenant shall have given written notice to Landlord of its exercise of
such option not less than nine months prior to the expiration of the original
term. All of the terms and provisions of this Lease shall be applicable during
the Extension Term except that Tenant
-3-
shall have no option to extend the term of the Lease beyond the Extension Term.
SECTION 3 Condition of Premises
Section 3.1. Condition of Premises. Tenant agrees to accept the
Premises in its present "as is" condition.
SECTION 4 Fixed Rent
Section 4.1. The Fixed Rent. Tenant shall pay rent to Landlord at the
Address of Landlord or at such other place or to such other person or entity as
Landlord may by notice to Tenant from time to time direct, at the Annual Fixed
Rental Rate set forth in Section 1, in equal installments equal to one-twelfth
(1/12) of the Fixed Rental in advance on the first day of each calendar month
included in the term, and for any portion of a calendar month at the beginning
or end of the term, at the rate payable in advance for such portion.
Section 4.2 Producer Price Index Rate. For purposes hereof, the
"Producer Price Index" shall mean the national Producer Price Indexes for
Finished Goods as published monthly by the Bureau of Labor Statistics of the
U.S. Department of Labor with such index equal to 100 for the year 1982.
Effective as of January 1, 2001, the Fixed Rental for the Premises, shall
be increased in proportion to the percentage increase in the Producer Price
Index by comparing the Producer Price Index for December, 1995 with the Producer
Price Index for December, 2000.
The increased Fixed Rental shall be determined by multiplying a fraction in
which the December, 1995 Producer Price Index is the denominator and the
December, 2000 Producer Price Index is the numerator against the $336,203.88
annual Fixed Rental to determine the new Fixed Rental. The Fixed Rental, so
determined, shall be effective for the period January 1, 2001 through December
31, 2001.
Thereafter, during the remainder of the current term of this Lease
(the period from January 1, 2002 through December 31, 2005), the Fixed
Rental for the Premises shall be increased annually, based upon the
percentage increase in the Producer Price Index. For the period January
1, 2002 through December 31, 2002, the calculation shall be made as in
-4-
the immediately preceding paragraph except that the numerator shall be the
Producer Price Index for December, 2001 and the denominator shall be the
Producer Price Index for December, 1995 with the fraction multiplied against the
$336,203.88 annual Fixed Rental. For the period January 1, 2003, through
December 31, 2003, the numerator shall be the Producer Price Index for December,
2002; and for the period January 1, 2004 through December 31, 2004, the
numerator shall be the Producer Price Index for December, 2003; and for the
period January 1, 2005 through December 31, 2005, the numerator shall be the
Producer Price Index for December 2004; and, if the Extension Term option has
been exercised pursuant to Section 2.3, for the period January 1, 2006 through
December 31, 2006, the numerator shall be the Producer Price Index for December,
2005; for the period January 1, 2007 through December 31, 2007, the numerator
shall be the Producer Price Index for December, 2006; for the period January 1,
2008 through December 31, 2008, the numerator shall be the Producer Price Index
for December, 2007; for the period January 1, 2009 through December 31, 2009,
the numerator shall be the Producer Price Index for December, 2008; and for the
period January 1, 2010 through December 31, 2010, the numerator shall be the
Producer Price Index for December, 2009. In each case, the denominator shall be
the Producer Price Index for December, 1995 and, in each case, the fraction
shall be multiplied against the $336,203.88 annual Fixed Rental.
In the event that the calculation of the Fixed Rental pursuant to this
Section 4.2 results in the reduction of the Fixed Rental, then the Fixed Rental
shall not be reduced but, for the period until the next rent adjustment shall be
calculated, shall be maintained at the level at which it was just prior to the
calculation which would have otherwise resulted in a reduction of the Fixed
Rental.
LEASES
SECTION 5 Real Estate and Other Taxes
Section 5.1. Real Estate Taxes. Tenant shall pay to the appropriate
taxing or governmental authority all taxes, assessments (special, betterment or
otherwise), levies, fees, water and sewer rents and charges, and all other
government levies and charges, general and special, ordinary and extraordinary,
foreseen and unforeseen, which are, at any time prior to or during the term
hereof, imposed or levied upon or assessed against the Lot or Building
(collectively "taxes and assessments" or if singular "tax or assessment").
-5-
If, by law, any tax or assessment is payable, or may at the option of the
taxpayer be paid, in installments (whether or not any interest shall accrue on
the unpaid balance of such tax or assessment), unless Tenant shall otherwise
direct, Landlord shall elect to pay the same in installments over a period of
time to be mutually agreed to by Landlord and Tenant but in no event longer than
the longest amortization period available to the taxpayer, and only the
installments thereof (and interest thereon) becoming due during the term shall
be payable by Tenant hereunder.
All payments shall be made by Tenant on or before the due date of such
taxes and assessments, but in no event shall Tenant be liable for any payment
until fifteen (15) days after Landlord shall have delivered the tax xxxx
therefor to Tenant, and if any penalty or interest shall accrue because Landlord
shall not have timely delivered any such xxxx to Tenant, Landlord shall pay such
penalty or interest.
Taxes or assessments shall not include any income taxes, excess profits
taxes, excise taxes, franchise taxes, estate, succession, inheritance or
transfer taxes.
SECTION 6 Insurance
Section 6.1. Tenant's Insurance. Tenant shall maintain throughout
the term the following insurance:
(a) commercial general liability insurance for any injury to person or
property occurring on the Premises, naming as insured Tenant, Landlord and such
persons, including, without limitation, Landlord's managing agent, as Landlord
shall designate from time to time, in amounts which shall, at the beginning of
the Term, be at least equal to the limits set forth in Section 1, and, from time
to time during the term, shall be for such higher limits as are reasonably
required by Landlord;
(b) workers' compensation insurance with statutory limits covering all of
Tenant's employees working at the Premises;
(c) all risk, special form property insurance on a replacement cost,
agreed amount basis, in an amount not less than one hundred percent (100%) of
the full insurable value of the Building, together with business interruption or
rental loss coverage and, if Tenant so elects, flood coverage to the extent the
same is available, insuring the Building and its rental value, with deductibles
not to exceed $10,000 or one percent (1%) of the face amount of the policy,
whichever is less, naming Landlord, Tenant,
-6-
and Landlord's mortgagee as insureds, as their respective interests may appear;
and
(d) insurance against loss or damage from sprinklers and from leakage or
explosions or cracking of boilers, pipes carrying steam or water, or both,
pressure vessels or similar apparatus, in the so-called "broad form," in such
amounts and with such deductibles as Tenant may reasonably consider appropriate,
and insurance against such other hazards and in such amounts as may from time to
time be reasonably required by any bank, insurance company or other lending
institution holding a mortgage on the Premises.
For the purposes of this Section, "full insurable value" shall mean the
actual cost of replacing the Building, without allowance for depreciation and
exclusive of the cost of excavations, foundations and footings, as determined by
the company issuing the insurance policy at the time of the policy issued. Not
more frequently than once every two (2) years, either party shall have the right
to notify the other party that it elects to have the full insurable value
redetermined by the insurance company, and the insurance policy shall be
adjusted according to the redetermination when made by the insurance company.
Section 6.2. Requirements Applicable to Insurance Policies. All
policies for insurance required under the provisions of Section 6.1 shall be
obtained from responsible companies qualified to do business in the Commonwealth
of Pennsylvania and in good standing therein, which companies and the amount of
insurance allocated thereto shall be subject to Landlord's approval, such
approval not to be unreasonably withheld or delayed. Tenant agrees to furnish
Landlord with insurance company certificates of all such insurance and copies of
the policies therefor prior to the Term Commencement Date and of each renewal
policy at least thirty (30) days prior to the expiration of the policy it
renews. Each such policy shall be noncancellable with respect to the interest of
Landlord and such mortgagees without at least thirty (30) days' prior written
notice thereto.
Section 6.3. Waiver of Subrogation. All insurance which is carried by
either party with respect to the Premises or to furniture, furnishings, fixtures
or equipment therein or alterations or improvements thereto, whether or not
required hereunder, shall include provisions which either designate the other
party as one of the insured or deny to the insurer acquisition by subrogation of
rights of recovery against the other party to the extent such rights have been
waived by the insured party prior to occurrence of loss or injury to the extent
that such provisions may be effective without making it impossible to obtain
insurance coverage
-7-
from responsible companies qualified to do business in the Commonwealth of
Pennsylvania (even though extra premium may result therefrom) and without
voiding the insurance coverage in force between the insurer and the insured
party. On reasonable request, each party shall be entitled to have duplicates or
certificates of policies containing such provisions. Each party hereby waives
all rights of recovery against the other for loss or injury against which the
waiving party is protected by insurance containing such provisions, reserving,
however, any rights with respect to any excess of loss or injury over the amount
recovered by such insurance.
SECTION 7 Utilities
Section 7.1. Utilities. Tenant shall make all arrangements for and
shall pay before delinquent all charges for water, sewer, gas, electricity and
other utilities or services used or consumed in the Premises, whether called
charge, tax, assessment, fee or otherwise, including, without limitation, water
and sewer use charges and taxes, if any. Landlord shall not be liable for any
interruption or failure in the supply of any such utilities to the Premises
unless due to the negligence or willful misconduct of Landlord, its employees or
agents.
SECTION 8 Tenant's Covenants
Section 8.1. Repair and Maintenance. Except as otherwise provided in
Section 9, Tenant shall keep the Premises in as good order, condition and repair
as they are in on the Term Commencement Date or may be put in during the term,
reasonable use and wear and tear excepted, and shall maintain and repair the
exterior walls, roof, foundation, structural supports of the Building and
heating, plumbing, electrical, air conditioning and mechanical systems of the
Building and Premises to the extent necessary to keep the same in such
condition. Tenant shall maintain and repair the landscaped areas, curbs, cellar
doors, awnings and parking areas, sidewalks and driveways, and shall clean and
provide snowplowing for the same. Tenant shall keep in a safe, secure and
sanitary condition all trash and rubbish temporarily stored at the Premises and
shall arrange for and be responsible for all of the costs of a trash and rubbish
removal service in connection with Tenant's use of the Premises.
Section 8.2. Use. Tenant shall use the Premises only for the Permitted
Uses and shall from time to time procure all licenses and permits necessary
therefor at Tenant's sole expense.
Section 8.3. Compliance with Law and Insurance Requirements. Tenant
shall make all repairs, alterations, additions or
-8-
replacements to the Premises required by any law or ordinance or any order or
regulation of any public authority arising from Tenant's use of the Premises and
shall keep the Premises equipped with all safety appliances so required. Tenant
shall not dump, flush, or in any way introduce any hazardous substances or any
other toxic substances into the septic, sewage or other waste disposal system
serving the Premises, or generate, store or dispose of hazardous substances in
or on the Premises or dispose of hazardous substances from the Premises to any
other location, other than in compliance with the Resource Conservation and
Recovery Act of 1976, 42 U.S.C. (S)6901 et seq., and all other applicable
federal, state or local codes, regulations, ordinances and laws. Tenant shall
comply with the orders and regulations of all governmental authorities with
respect to zoning, building, fire, health and other codes, regulations,
ordinances or laws applicable to the Premises. "Hazardous substances" as used in
this Section shall mean "hazardous substances" as defined in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.
(S)9601 et seq. and regulations adopted pursuant to such Act.
Landlord may, if it so elects, make any of the repairs, alterations,
additions or replacements referred to in this Section 8.3 which affect the
Building structure or the Building systems, and Tenant shall reimburse Landlord
for the reasonable cost thereof on demand.
Tenant will provide Landlord, from time to time upon Landlord's request,
with all records and information regarding any hazardous substance maintained on
the Premises by Tenant.
Landlord shall have the right, at Tenant's expense, to make such
inspections as Landlord shall reasonably elect from time to time to determine if
Tenant is complying with this Section.
Tenant shall comply promptly with the recommendations of any insurer which
may be applicable to the Premises by reason of Tenant's use thereof. In no event
shall any activity be conducted by Tenant on the Premises which may give rise to
any cancellation of any insurance policy or make any insurance unobtainable.
Section 8.4. Tenant's Work. Tenant shall have the right, at any time
and from time to time during the term of this Lease, at its own cost and
expense, to make such installations, alterations, additions or improvements in
or to the Premises as Tenant may elect, provided, however, that Tenant shall not
construct any additions to the existing Building or erect any new buildings
without on each occasion obtaining
-9-
the prior written consent of Landlord, such consent not to be unreasonably
withheld or delayed. Any such work so approved by Landlord shall be performed
only in accordance with plans and specifications therefor approved by Landlord.
Tenant shall procure at Tenant's expense all necessary permits and licenses
before undertaking any work on the Premises and shall perform all such work in a
good and workmanlike manner employing materials of good quality and so as to
conform with all applicable zoning, building, fire, health and other codes,
regulations, ordinances and laws and with all applicable insurance requirements.
Tenant shall keep the Premises at all times free of liens for labor and
materials. Tenant shall save Landlord harmless and indemnified from all injury,
loss, claims or damage to any person or property occasioned by or growing out of
such work. Landlord may inspect the work of Tenant at reasonable times and give
notice of observed defects.
Section 8.5. Indemnity. Tenant shall defend, with counsel approved by
Landlord, all actions against Landlord, any partner, trustee, stockholder,
officer, director, employee or beneficiary of Landlord, ("Indemnified Parties")
with respect to, and shall pay, protect, indemnify and save harmless, to the
extent permitted by law, all Indemnified Parties from and against, any and all
liabilities, losses, damages, costs, expenses (including reasonable attorneys'
fees and expenses), causes of action, suits, claims, demands or judgments of any
nature arising from (a) injury to or death of any person, or damage to or loss
of property, occurring in the Premises or connected with the use, condition or
occupancy of any thereof unless caused by the negligence of Landlord or its
servants, agents or contractors, (b) violation of this Lease by Tenant,
including any violations of Section 8.3, or (c) any act, fault, omission, or
other misconduct of Tenant or its agents, contractors, licensees, sublessees or
invitees.
Section 8.6. Landlord's Right to Enter. Tenant shall permit Landlord
and its agents to enter into the Premises at reasonable times and upon
reasonable notice to examine the Premises, make such repairs and replacements as
Landlord shall be required to perform, or show the Premises to prospective
purchasers and lenders, and, during the last six months of the term, to show the
Premises to prospective tenants and to keep affixed in suitable places notices
of availability of the Premises.
Section 8.7. Personal Property at Tenant's Risk. All furnishings,
fixtures, machinery, equipment, effects and property of every kind of Tenant and
of all persons claiming by, through or under Tenant which may be on the Premises
shall be at the sole risk and hazard of Tenant and if the whole or any part
thereof shall be destroyed or damaged
-10-
by fire, water or otherwise, or by the leakage or bursting of water pipes, steam
pipes or other pipes, by theft or from any other cause, no part of such loss or
damage shall be charged to or to be borne by Landlord, except that Landlord
shall in no event be indemnified or held harmless or exonerated from any
liability to Tenant for any injury, loss, damage or liability (i) not covered by
Tenant's insurance to the extent prohibited by law, or (ii) caused by the
negligence of Landlord, its employees, agents or contractors. Tenant shall
insure Tenant's personal property. Tenant shall have the right to move its
trade fixtures, machinery and equipment at the termination of the Lease,
including, without limitation, anything affixed to the Premises by Tenant at its
expense for purposes of trade, manufacture, ornamentation or domestic use.
Section 8.8. Payment of Landlord's Cost of Enforcement. Tenant shall
pay, on demand, Landlord's expenses, including reasonable attorneys' fees,
incurred in enforcing any obligation of Tenant under this Lease or in curing any
default by Tenant under this Lease as provided in Section 10.4.
Section 8.9. Yield up. At the expiration of the term or earlier
termination of this Lease, Tenant shall surrender all keys to the Premises,
remove all of its trade fixtures, machinery and equipment and personal property
in the Premises, remove all Tenant's signs wherever located, repair all damage
caused by such removal and yield up the Premises (including all installations
and improvements made by Tenant except for trade fixtures, machinery, equipment,
and Tenant's personal property) broom-clean and in the same good order and
repair in which Tenant is obliged to keep and maintain the Premises under this
Lease, wear and tear and casualty excepted. Any property not so removed shall be
deemed abandoned and may be removed and disposed of by Landlord in such manner
as Landlord shall determine and Tenant shall pay Landlord the entire cost and
expense incurred by it in effecting such removal and disposition and in making
any incidental repairs and replacements to the Premises and for use and
occupancy during the period after the expiration of the term and prior to
Tenant's performance of its obligations under this Section 8.9.
Section 8.10. Estoppel Certificate. Each of the parties shall upon
not less than ten (10) business days' prior notice by the other, execute,
acknowledge and deliver to such other party a statement in writing certifying
that this Lease is unmodified and in full force and effect and that, except as
stated therein, the signer of such certificate has no knowledge of any defenses,
offsets or counterclaims against Tenant's obligations to pay the Fixed Rental
and any other charges and to perform
-11-
its other covenants under this Lease (or, if there have been any modifications
that the same is in full force and effect as modified and stating the
modifications and, if there are any defenses, offsets or counterclaims, setting
them forth in reasonable detail), the dates to which the Fixed Rental and other
charges have been paid and a statement that such other party is not in default
hereunder (or if in default, the nature of such default, in reasonable detail).
Any such statement delivered pursuant to this Section 8.10 may be relied upon by
the party requesting it or by any prospective mortgagee, purchaser, assignee or
subtenant.
Section 8.11. Holding Over. Tenant shall vacate the Premises
immediately upon the expiration or sooner termination of this Lease. If Tenant
shall retain possession of the Premises or any part thereof after the
termination of the term without Landlord's express consent, Tenant shall pay
Landlord rent at the monthly rate specified in Section 1 for the time Tenant so
remains in possession and, in addition thereto, shall pay Landlord for all
direct damages, sustained by reason of Tenant's retention of possession. The
provisions of this Section shall not exclude Landlord's rights of reentry or any
other right hereunder, including, without limitation, the right to refuse the
monthly rent and instead to remove Tenant through summary proceedings for
holding over beyond the expiration of the term of this Lease.
Section 8.12. Assignment and Subletting. Tenant shall not assign,
transfer, mortgage or pledge this Lease or grant a security interest in Tenant's
rights hereunder or sublease all or any part of the Premises or suffer or permit
this Lease or the leasehold estate hereby created or any other rights arising
under this Lease to be assigned, transferred or encumbered, in whole or in part,
without the prior written consent of the Landlord, such consent not to be
unreasonably withheld or delayed. Any attempted assignment, transfer, mortgage,
pledge, grant of security interest, sublease or other encumbrance, except with
prior written approval thereof from Landlord, shall be void. No assignment,
transfer, mortgage, grant of security interest, sublease or other encumbrance,
whether or not approved, and no indulgence granted by Landlord to any assignee
or sublessee, shall in any way impair the continuing primary liability (which
after an assignment shall be joint and several with the assignee) of Tenant
hereunder, and no approval in a particular instance shall be deemed to be a
waiver of the obligation to obtain Landlord's approval in any other case.
Notwithstanding the foregoing, Tenant may enter into any of the following
transfers without obtaining the prior written consent of Landlord:
-12-
(a) Tenant may sublease all or part of the Premises or assign its
interest in this Lease to any corporation which controls, is controlled by, or
is under common control with the original Tenant to this Lease by means of an
ownership interest of more than 50%;
(b) Tenant may assign its interest in this Lease to a corporation
which results from a merger, consolidation or other reorganization in which
Tenant is not the surviving corporation;
(c) Tenant may assign this Lease to a corporation which purchases or
otherwise acquires all or substantially all of the assets of Tenant; and
(d) Tenant may mortgage and/or pledge this Lease and the leasehold
estate created hereby to The First National Bank of Boston, as Collateral Agent
for a syndicate of lenders under that certain Revolving Credit and Term Loan
Agreement to be entered into with Tenant, pursuant to which such lenders have
agreed to make revolving credit loans and term loans to Tenant in an aggregate
amount not to exceed $43,000,000.
Section 8.13. Overloading and Nuisance. Tenant shall not injure,
overload, deface or otherwise harm the Premises, commit any nuisance, permit the
emission of any objectionable noise, vibration or odor, make, allow or suffer
any waste or make any use of the Premises which is contrary to any law or
ordinance or which will invalidate any of Landlord's insurance.
Section 8.14. Signs. Tenant at its cost shall have the right to place,
construct and maintain on the Premises one or more signs advertising its
business on the Premises. Any sign that Tenant shall erect shall comply with all
laws and applicable governmental regulations and Tenant shall obtain any
approval required by such laws.
SECTION 9 Casualty or Taking
Section 9.1. Termination. In the event that greater than twenty-five
percent (25%), or such lesser percentage in the event that the suitability of
the Premises for Tenant's use is adversely affected thereby, of the ground floor
area of the Building or the Lot shall be taken by any public authority or for
any public use or destroyed by the action of any public authority (a "Taking")
then this Lease may be terminated by either Landlord or Tenant effective on the
effective date of the Taking. In the event that, greater than 25%, or such
lesser percentage in the event that
-13-
the suitability of the Premises for Tenant's use is adversely affected thereby,
of the Premises shall be destroyed or damaged by fire or casualty (a "Casualty")
and if Tenant's architect, engineer or contractor shall determine that it will
require in excess of one hundred twenty (120) days from the date of the Casualty
to restore the Premises, this Lease may be terminated by Tenant by notice to
Landlord within thirty (30) days after the casualty. In the case of a Taking,
such election, which may be made notwithstanding the fact that Landlord's entire
interest may have been divested, shall be made by the giving of notice by
Landlord or Tenant to the other within thirty (30) days after Landlord or
Tenant, as the case may be, shall receive notice of the Taking.
Section 9.2. Restoration. In the event of a Taking or a Casualty, if
neither Landlord nor Tenant exercises the election to terminate provided in
Section 9.1, this Lease shall continue in force and a just proportion of the
Fixed Rental and other charges hereunder, according to the nature and extent of
the damages sustained by the Premises, but in the case of a Casualty not in
excess of an equitable portion of the net proceeds of insurance recovered by
Landlord under the rental insurance carried pursuant to Section 6.1, shall be
abated until the Premises, or what may remain thereof, shall be put by Tenant in
proper condition for use subject to zoning and building laws or ordinances then
in existence, which, unless Landlord or Tenant has exercised its option to
terminate pursuant to Section 9.1, Tenant covenants to do with reasonable
diligence at Tenant's expense. Tenant's obligations with respect to restoration
shall not require Tenant to expend more than the net proceeds of insurance
recovered plus the amount of any deductible for such Casualty or net damages
awarded to Landlord for such Taking and made available for restoration by
Landlord's mortgagees. "Net proceeds of insurance recovered" or "net damages
awarded" refers to the gross amount of such insurance or damages less the
reasonable expenses of Tenant and Landlord in connection with the collection of
the same, including, without limitation, fees and expenses for legal and
appraisal services.
Notwithstanding the foregoing, in the event that Landlord's mortgagee does
not permit the net proceeds of insurance recovered or net damages awarded for
such Casualty or Taking to be made available to Tenant for restoration, or in
the event the net proceeds of insurance recovered for such Casualty plus the
amount of any deductible or the net damages awarded for such Taking shall be
insufficient to fully restore the Premises, or in the event that the Casualty is
not insured against under the policy of insurance required to be maintained by
Tenant under Section 6.1, then Tenant shall have the right to terminate this
Lease unless Landlord agrees to contribute the amount by which the actual costs
of
-14-
restoring the Premises exceed the net proceeds of insurance recovered or net
damages awarded.
SECTION 10 Default
Section 10.1. Events of Default. If
(a) Tenant shall default in the performance of any of its obligations to
pay the Fixed Rental or any other sum payable hereunder and if such default
shall continue for ten (10) days after notice from Landlord designating such
default;
(b) within thirty (30) days after notice from Landlord to Tenant
specifying any other default or defaults Tenant has not commenced diligently to
correct the default or defaults so specified or has not thereafter diligently
pursued such correction to completion;
(c) a petition is filed by Tenant for liquidation, or for reorganization
or an arrangement or for any other relief under any provision of the Bankruptcy
Code as then in force and effect; or
(d) an involuntary petition under any of the provisions of the Bankruptcy
Code is filed against Tenant and such involuntary petition is not dismissed
within sixty (60) days thereafter,
then, and in any of such cases, Landlord and the agents and servants of Landlord
lawfully may, in addition to and not in derogation of any remedies for any
preceding breach of covenant, and with or without process of law (forcibly, if
necessary) enter into and upon the Premises or any part thereof in the name of
the whole, or mail a notice of termination addressed to Tenant, and repossess
the same as of Landlord's former estate and expel Tenant and those claiming
through or under Tenant and without prejudice to any remedies which might
otherwise be used for arrears of rent or prior breach of covenant, and upon such
entry or mailing as aforesaid this Lease shall terminate, Tenant hereby waiving
all statutory rights (including, without limitation, rights of redemption, if
any) to the extent such rights may be lawfully waived.
Section 10.2. Remedies. In the event that this Lease is terminated
under any of the provisions contained in Section 10.1, Tenant shall remain
liable and shall pay punctually to Landlord all the sums and shall perform all
the obligations which Tenant covenants in this Lease to pay and to perform in
the same manner and to the same extent and at the same time as if this Lease had
not been terminated. In calculating the
-15-
amounts to be paid by Tenant pursuant to the preceding sentence, Tenant shall be
credited with the net proceeds of any rent obtained by Landlord by reletting the
Premises, after deducting all Landlord's reasonable expenses in connection with
such reletting, including, without limitation, all repossession costs, brokerage
commissions, fees for legal services and expenses of preparing the Premises for
such reletting, it being agreed by Tenant that Landlord may (a) relet the
Premises or any part or parts thereof for a term or terms which may at
Landlord's option be equal to or less than or exceed the period which would
otherwise have constituted the balance of the term hereof and may grant such
concessions and free rent as Landlord in its reasonable judgment considers
advisable or necessary to relet the same and (b) make such alterations, repairs
and decorations in the Premises as Landlord in its reasonable judgment considers
advisable or necessary to relet the same, and no action of Landlord in
accordance with the foregoing or failure to relet or to collect rent under
reletting shall operate or be construed to release or reduce Tenant's liability
as aforesaid. Alternatively, at the option of Landlord, in the event this Lease
is so terminated, Landlord shall be entitled to recover forthwith from Tenant as
liquidated damages and not a penalty, and in lieu of all other damages, the
excess of the total rent reserved for the residue of the term over the fair
market rental value of the Premises for the residue of the term, such excess to
be discounted to present value at per annum rate equal to the Base Rate of The
First National Bank of Boston then in effect.
Section 10.3. Remedies Cumulative. Except as otherwise expressly
provided herein, any and all rights and remedies which Landlord may have under
this Lease and at law and equity shall be cumulative and shall not be deemed
inconsistent with each other, and any two or more of all such rights and
remedies may be exercised at the same time to the greatest extent permitted by
law.
Section 10.4. Landlord's Right to Cure Defaults. At any time following
ten (10) days' prior notice to Tenant (except in cases of emergency when no
notice shall be required), Landlord may (but shall not be obligated to) cure any
default by Tenant under this Lease, and whenever Landlord so elects, all costs
and expenses incurred by Landlord, including reasonable attorneys' fees, in
curing a default shall be paid by Tenant to Landlord on demand, together with
interest thereon at the rate provided in Section 10.7 from the date incurred by
Landlord to the date of payment by Tenant.
Section 10.5. Effect of Waivers of Default. Any consent or permission
by Landlord to any act or omission which otherwise would be a
-16-
breach of any covenant or condition herein, or any waiver by Landlord of the
breach of any covenant or condition herein, shall not in any way be held or
construed (unless expressly so declared) to operate so as to impair the
continuing obligation of any covenant or condition herein, or otherwise operate
to permit the same or similar acts or omissions except as to the specific
instance. The failure of Landlord to seek redress for violation of, or to insist
upon the strict performance of, any covenant or condition of this Lease shall
not be deemed a waiver of such violation nor prevent a subsequent act, which
would have originally constituted a violation, from having all the force and
effect of an original violation. The receipt by Landlord of rent with knowledge
of the breach of any covenant of this Lease shall not be deemed to have been a
waiver of such breach by Landlord or of any of Landlord's remedies on account
thereof, including its right of termination for such default.
Section 10.6. No Accord and Satisfaction No acceptance by Landlord of
a lesser sum than the Fixed Rental or any other charge then due shall be deemed
to be other than on account of the earliest installment of such rent or charge
due, unless Landlord elects by notice to Tenant to credit such sum against the
most recent installment due. Any endorsement or statement on any check or any
letter accompanying any check or payment as rent or other charge shall not be
deemed an accord and satisfaction, and Landlord may accept such check or payment
without prejudice to Landlord's right to recover the balance of such installment
or pursue any other remedy under this Lease or otherwise.
Section 10.7. Interest on Overdue Sums. If Tenant shall fail to pay
Fixed Rental or any other sum payable by Tenant to Landlord by the due date
thereof (i.e., the due date disregarding any requirement of notice from Landlord
or any period of grace allowed to Tenant), the amount so unpaid shall bear
interest at a variable rate (the "Delinquency Rate") equal to two percent (2%)
in excess of the base rate of The First National Bank of Boston from time to
time in effect commencing with the due date and continuing through the day on
which payment of such delinquent payment with interest thereon is paid. If such
rate is in excess of any maximum interest rate permissible under applicable law,
the Delinquency Rate shall be the maximum interest rate permissible under
applicable law.
SECTION 11 Superiority of Lease; Option to Subordinate
Section 11.1. Superiority of Lease; Option to Subordinate. This Lease
shall be superior to and shall not be subordinate to any mortgage on the
Premises except that Landlord shall subordinate this
-17-
Lease to any mortgage of the Premises provided that the holder of record thereof
shall enter into an agreement with Tenant, in such holder's customary form, by
the terms of which such holder shall agree to (a) recognize the rights of Tenant
under this Lease, (b) perform Landlord's obligations hereunder arising after the
date of such holder's acquisition of title and (c) accept Tenant as tenant of
the Premises under the terms and conditions of this Lease in the event of
acquisition of title by such holder through foreclosure proceedings or otherwise
and Tenant shall agree to recognize the holder of such mortgage as Landlord in
such event, which agreement shall be made expressly to bind and inure to the
benefit of the successors and assigns of Tenant and of the holder and upon
anyone purchasing the Premises at any foreclosure sale. Tenant agrees to execute
and deliver any appropriate instruments necessary to carry out the agreements
contained in this Section 11.1.
SECTION 12 Miscellaneous Provisions
Section 12.1. Notices from One Party to the Other. All notices
required or permitted hereunder shall be in writing and addressed, if to Tenant,
at the Original Address of Tenant or such other address as Tenant shall have
last designated by notice in writing to Landlord and, if to Landlord, at the
Original Address of Landlord or such other address as Landlord shall have last
designated by notice in writing to Tenant. Any notice shall be deemed duly given
when delivered or tendered for delivery at such address.
Section 12.2. Quiet Enjoyment. Landlord agrees that upon Tenant's
paying the rent and performing and observing the terms, covenants, conditions
and provisions on its part to be performed and observed, Tenant shall and may
peaceably and quietly have, hold and enjoy the Premises during the term without
any manner of hindrance or molestation from Landlord or anyone claiming under
Landlord, subject, however, to the terms of this Lease.
Section 12.3. Lease Not to Be Recorded; Notice of Lease. Tenant agrees
that it will not record this Lease. Landlord and Tenant agree that, on the
request of either, they will execute and record a notice or memorandum of lease
in form reasonably acceptable to Landlord and Tenant.
Section 12.4. Bind and Inure. The obligations of this Lease shall run
with the land, and this Lease shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns.
-18-
Section 12.5. Acts of God. In any case where either party hereto is
required to do any act, delays caused by or resulting from acts of God, war,
civil commotion, fire, flood or other casualty, labor difficulties, shortages of
labor, materials or equipment, government regulations, unusually severe weather,
or other causes beyond such party's reasonable control shall not be counted in
determining the time during which work shall be completed, whether such time be
designated by a fixed date, a fixed time or a "reasonable time," and such time
shall be deemed to be extended by the period of such delay.
Section 12.6. Landlord's Default. Landlord shall not be deemed to be
in default in the performance of any of its obligations hereunder unless it
shall fail to perform such obligations and unless within thirty (30) days after
notice from Tenant to Landlord specifying such default Landlord has not
commenced diligently to correct the default so specified or has not thereafter
diligently pursued such correction to completion.
Section 12.7. Permitted Contests. Tenant shall have the right to
contest or review the amount or validity of all taxes and assessments and any
repairs, alterations, additions, and improvements required by any law, rule,
regulation or requirement of any public authority and the effect on the Premises
or Tenant's use thereof of any laws, rules, regulations and requirements of any
public authority by legal proceedings, or in such other manner as it may deem
suitable (which, if instituted, Tenant shall conduct, if necessary or
appropriate, in the name of and with the cooperation of Landlord). Landlord
shall execute all documents necessary or appropriate to comply with the
foregoing. Pending any such proceeding Tenant shall have the right to pay any
taxes and assessments in the minimum amount (but not in excess thereof) required
by law in order to maintain such proceeding. Notwithstanding the foregoing,
however, Tenant shall promptly pay all taxes and assessments if at any time the
Premises or any part thereof shall then be immediately subject to forfeiture or
if Landlord shall be subject to any criminal liability arising out of the
nonpayment thereof.
Section 12.8. Miscellaneous. This Lease shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania. There
are no prior oral or written agreements between Landlord and Tenant affecting
this Lease.
-19-
WITNESS the execution hereof under seal as of the day and year first above
written.
TENANT:
KLEARFOLD, INC.
By: /s/ Xxxxx Xxxxxx
---------------------------
Name: Xxxxx Xxxxxx
Title: President
LANDLORD:
/s/ Xxxxxx X. Xxxxxx
------------------------------
Xxxxxx X. Xxxxxx
Exhibit A
---------
Legal Description of Lot
ALL THAT CERTAIN tract of land situate in the Township of Warrington, County of
Bucks, Commonwealth of Pennsylvania, bounded and described in accordance with a
Final Plan of the Xxxx Valley Industrial Park made for Barnsel, Inc. by
Engineering and Planning Associates, Inc. of Warrington, Pennsylvania, dated
August 25, 1966, as follows, to wit:
BEGINNING at a point on the northwesterly right-of-way line of Valley Road (T-
381) (existing 33 feet wide, proposed 80 feet wide) said point being located
South 41 degrees 36 minutes 45 seconds West 1,630.05 feet from the intersection
of said Northwesterly right-of-way line of Valley Road and the Southwesterly
right-of-way line of Street Road (LR 09040) (existing 80 feet wide, proposed 120
feet wide); THENCE the following courses and distances: (1) Continuing to
follow aforementioned Northwesterly right-of-way line of Valley Road South 41
degrees 36 minutes 45 seconds West 421.06 feet to a point; (2) THENCE North 48
degrees 23 minutes 15 seconds West 721.42 feet to a point; (3) THENCE North 40
degrees 51 minutes 50 seconds East 421.10 feet to a point; (4) THENCE South 48
degrees 23 minutes 15 seconds East 726.92 feet to the first mentioned point and
place of beginning.
CONTAINING therein 7 acres, more or less.
BEING LOT NO.5 as shown on the above mentioned plan.
BEING KNOWN AS 000 Xxxxxx Xxxx
XXXXXX PARCEL NO.50-31-33-6
TOGETHER with the free and common use, right, liberty and privilege of an access
road at times hereafter, forever, in common with the owners, tenants and
occupiers of said parcels of ground abutting same to the use thereof.
