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Exhibit 10(i)
4/5/95
INDUSTRIAL LEASE AND OPTION
This Lease, is executed this 17th day of April, 1995, by and
between the City of Cedar Falls, Iowa, LESSOR, and Clay Equipment
Corporation, an Iowa corporation, with its principal office at 101
Lincoln Street, Cedar Falls 50613, LESSEE,
WITNESSETH:
WHEREAS, Lessor is the owner of the real property hereinafter
described and has the lawful authority to lease the same for the
purposes hereinafter described; and
WHEREAS, Lessor is a corporation organized and existing under the
laws of the State of Iowa, and as such is empowered to promote and
solicit industrial and economic development projects as authorized and
to make and execute leases, contracts and other instruments necessary
or convenient for the exercise of its powers and purposes to acquire,
whether by purchase, lease or otherwise, and to improve, maintain,
equip and furnish one or more projects, including real and personal
property deemed necessary in connection therewith, and to lease to
others any of its projects and to charge and collect rent therefore;
and
WHEREAS, to finance a portion of this project hereinafter
described, consisting of the hereinafter described real estate and a
facility for the conduct of manufacturing operations, including the
acquisition and construction of the facility, to be located on Lots 2
and 3, Cedar Falls Industrial Park, Phase VI, (the "Project"), the
United States Department of Commerce Economic Development
Administration (the "EDA") has authorized a Grant for Flood Relief
Project Award No. 05-19-61126 (the "EDA Grant") to Lessor; and
WHEREAS, pursuant to said Grant and the above powers, Lessor is
authorized to enter into this Lease with Lessee, subject to the
approval of the terms thereof by the EPA; and
WHEREAS, pursuant to the foregoing recitals, Lessor and Lessee now
enter into this Industrial Lease and Option;
NOW, THEREFORE, in consideration of the premises and the mutual
representations, covenants and agreements herein contained, LESSOR AND
LESSEE HEREBY REPRESENT, COVENANT AND AGREE AS FOLLOWS:
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1. Lease of Premises. Lessor does hereby lease and demise to
Lessee and Lessee does hereby hire and take as Lessee upon and subject
to the terms and conditions herein set forth the tract of real property
hereinafter described, together with all improvements and appurtenances
thereto, located in Cedar Falls, Black Hawk County, Iowa, (hereinafter
the "premises" or the "project"), to-wit:
Lots 2 and 3, Cedar Falls Industrial Park, Phase VI in the
City of Cedar Falls, Black Hawk County, Iowa.
2. Term of Lease. (a) The initial term of the Lease (the
"Lease Term") shall be a period of ten (10) years, commencing on the
first day of the first month following completion of the improvements
by the contractor, acceptance thereof by Lessor, and delivery of the
premises to Lessee, and terminating on the last day of the one hundred
twentieth (120th) month thereafter, both dates inclusive; subject to
(1) the limited right of termination by Lessor and other remedies for
default as provided in Paragraph 7 hereof, and (2) the option for
Lessee to renew this Lease for an additional period as provided in
Paragraph 2(b) below.
(b) The Lease Term may be renewed and extended by
Lessor, at its option and subject to the review and approval by the
United States Department of Commerce, Economic Development
Administration (the "EDA"), as provided in the Special Terms and
Conditions of the EDA Grant, for an additional period of five years.
Lessor will not unreasonably withhold the lease extension option to
Lessee. The rental amount for months one hundred twenty-one (121)
through one hundred eighty (180) shall be no less than the current
lease amount provided in Paragraph 3(a)(A) hereof nor shall it increase
more than three percent (3%).
Lessor shall exercise such option to renew the Lease Term unless Lessee
is in default and has failed to cure such default as provided in
Paragraph 7 hereof by the time of expiration of the Lease Term. If
Lessor intends not to renew the Lease, Lessor shall give not less than
180 days' prior written notice to Lessee of its intention not to so
renew.
(c) Lessee will have the option to purchase said
property upon expiration of the lease extension referenced in Paragraph
2(b) subject to those conditions provided in Paragraph 6 hereof.
3. Rental Amounts. (a) Lessee shall pay Lessor, as a rental
fee the aggregate of the following amounts commencing on the first day
of the first month following the issuance of an Occupancy Permit by
City:
(A) Monthly Lease Payments at the rate of sixteen thousand
seven hundred twenty-two dollars and no cents ($16,722.00) during the
initial one hundred twenty (120) months of the term of the Lease.
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(B) If the Lease Term is renewed by Lessor as provided in
Paragraph 2(b) hereof, lease payments for months one hundred twenty-one
(121) through one hundred eighty (180) shall be no less than the
current lease amount provided in Paragraph 3(a)(A) hereof nor shall it
increase more than three percent (3%).
(2) A late payment penalty of three percent (3%) of the
applicable Monthly Lease Payment as stated above in the event such
Payment is not made by Lessee within five days after the due date
thereof.
(3) All other payments of whatever nature which Lessee has
agreed to pay or assume hereunder.
(b) The obligations of Lessee to make the foregoing
Lease Payments on or before the date the same become due and to perform
all of its other obligations, covenants and agreements hereunder shall
be absolute and unconditional, without notice or demand, and without
abatement, deduction, set-off, counterclaim, recoupment or defense or
any right of termination or cancellation arising, and, except as may be
otherwise expressly provided herein, notwithstanding any damage to or
loss, theft or destruction of the Project or any part thereof, any
failure of consideration or frustration of commercial purpose, or any
change in Lessor's legal organization or status.
(c) Nothing in this Lease shall be construed to release
Lessor from the performance of any agreement on its part herein
contained or as a waiver by Lessee of any rights or claims which Lessee
may have against Lessor under this Lease or otherwise, but any recovery
upon such rights and claims shall be had from Lessor separately, it
being the intent of this Lease that Lessee shall be unconditionally and
absolutely obligated to perform fully all of its obligations,
agreements and covenants under this Lease (including the obligation to
make Lease Payments). Lessee may, however, at its own cost and expense
and in its own name or in the name of Lessor, prosecute or defend any
action or proceeding or take any other action involving third persons
which Lessee deems reasonably necessary in order to secure or protect
its right of possession, occupancy and use of the Project, and in such
event Lessor hereby agrees to cooperate fully with Lessee and to take
all action necessary to effect the substitution of Lessee for Lessor in
any such action or proceeding if Lessee shall so request.
4. Lessor's Covenants. Lessor covenants and agrees:
(a) That Lessor owns the premises and has good and
legal right to lease said premises to Lessee and that Lessor will put
Lessee in possession thereof, and, so long as Lessee pays the Lease
Payments and Additional Payments hereby reserved and observes and
performs the several covenants, stipulations and agreements provided on
Lessee's part, Lessee shall peaceably hold and enjoy the demised
premises during the term hereof without any interruption by Lessor or
by any person rightfully claiming under Lessor;
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(b) That Lessee may, at its sole cost and expense, make
other such additions, changes and alterations in and to any part of the
premises as Lessee from time to time may deem necessary or advisable,
subject to the express conditions set forth in Paragraph 5 hereof;
(c) That Lessee, notwithstanding the provisions of
Paragraph 5(e) hereof, shall have the right to contest any mechanic's
or other similar lien filed against or upon the described premises if
within the 30-day period referred to in said Paragraph 5(e) hereof it
notifies Lessor in writing of its intention to do so and, if requested
by Lessor, deposits with Lessor a bond (or other reasonably acceptable
security) in favor of Lessor, with a surety company reasonably
acceptable to Lessor as surety, in the penal sum of at least the amount
of the lien claim so contested plus an additional amount equal to
interest thereon for six months at the current statutory rate of
interest, indemnifying and protecting Lessor from and against any
liability, loss, damage, cost and expense of whatever kind or nature
growing out of or in any way connected with said asserted lien in the
contesting thereof, but all on the condition that Lessee diligently
prosecute such contest, at all times effectively stay or prevent any
official or judicial sale of the premises, or any part thereof or
interest therein, under execution or otherwise, and pay or otherwise
satisfy any final judgment adjudging or enforcing such contested lien
claim and thereafter promptly procure record release or satisfaction
thereof;
(d) That any part of the structure and any fixtures
paid from funds of Lessor shall remain the property of Lessor. Lessee
shall have the right to remove from the premises any and all machinery,
equipment and fixtures owned by or paid for by Lessee, provided,
however, that Lessee shall repair any physical damage to Lessor's
property caused by the removal of any such machinery, equipment or
fixtures;
(e) That Lessee shall have the right, in its or
Lessor's name, to contest the validity or amount of any imposition, as
defined in Paragraph 5(o) hereof, which Lessee is required to bear, pay
and discharge pursuant to the terms of this Lease, by appropriate legal
proceedings instituted, at least ten (10) days before the imposition
complained of becomes delinquent, but only if and provided that Lessee,
before instituting any such contest, gives Lessor written notice of its
intention so to do and, if requested in writing by Lessor, deposits
with Lessor a bond (or other reasonably acceptable security) in favor
of Lessor, with a surety company reasonably acceptable to Lessor as
surety, in a penal sum of at least the amount of the imposition so
contested plus an additional amount equal to interest thereon for six
months at the current statutory rate of interest, conditioned upon the
payment, if so adjudged, of the contested imposition, together with all
interest and penalties accruing thereon and costs of suit, if any, and
provided further that Lessee diligently prosecutes any such contest, at
all times effectively stays or prevents any official or judicial sale
therefore, under execution or otherwise, and promptly pays any final
judgment enforcing the imposition so contested, and thereafter promptly
secures record release or satisfaction
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thereof; and provided further that Lessee hold Lessor whole and
harmless from any costs and expenses Lessor may incur related to any
such contest;
(f) That Lessor is authorized to (i) enter into this
Lease and perform its obligations hereunder, and (ii) grant Lessee the
option to purchase the premises as set forth herein;
(g) That Lessor will not transfer or encumber the
premises or impose any new restrictions on the premises without
Lessee's prior written consent; and
(h) That Lessor will construct the building and
improvements on the premises in accordance with the plans,
specifications and standards necessary for Lessee to continue its
operations, and approved by Lessee and the EDA.
(i) To bear, pay and discharge, before the delinquency
thereof, all taxes and assessments, general and special, if any, which
may be lawfully taxed, charged, levied, assessed or imposed upon or
against or be payable for or in respect of the demised premises, or any
part thereof, or any improvements at any time thereon or Lessee's
interest therein or under this Lease, including any new lawful taxes
and assessments not of the kind enumerated above to the extent that the
same are lawfully made, levied or assessed in lieu of or in addition to
taxes or assessments now or heretofore customarily levied against said
premises or against comparable real property in general, and further
including all water and sewer charges, assessments, and other
governmental charges and impositions whatsoever, foreseen or
unforeseen.
5. Lessee's Covenants. Lessee covenants and agrees:
(a) To pay the Lease Payments at the time and in the
manner herein provided to Lessor or Lessor's order at such place as may
from time to time be reasonably designated by Lessor;
(b) To assume full responsibility for all maintenance,
upkeep, repair, replacement and improvement of any and all buildings,
improvements, machinery, equipment, fixtures and appurtenances of any
type now or hereafter located upon said property, and for the care and
maintenance of all exterior and unimproved portions thereof: and to
hold Lessor harmless from any responsibility or liability therefore of
any type whatsoever;
(c) To make no additions, changes or alterations in and
to any part of the premises, and improvements thereon, which will
adversely affect the structural strength of any part of the same or
which would change the character of said premises and improvements so
that the premises would not constitute a "facility" as defined in Iowa
law. All additions, changes and alterations made by Lessee, upon said
conditions, shall (i) be made in a workmanlike manner and in strict
compliance with all laws and ordinances applicable thereto, (ii) when
commenced, be prosecuted to completion with
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due diligence, and (iii) when completed, be deemed a part of the
premises; provided, however, that additions of machinery, equipment and
fixtures to the premises by Lessee, the cost of which is financed
totally by funds of Lessee independent of any nonfinancing therefore
now or hereafter provided by Lessor, and not constituting repairs,
renewals or replacements of items owned by Lessor at the time of
execution of this lease;
(d) Not do or permit others under its control to do any
work in or about the premises or related to the repair, rebuilding,
restoration, replacement, alteration of or addition to the premises, or
any part thereof, unless Lessee shall have first procured and paid for
all requisite municipal and other governmental permits and
authorizations. All such work shall be done in good and workmanlike
manner and in compliance with all applicable building, zoning and other
laws, ordinances, governmental regulations and requirements, and in
accordance with the requirements, rules and regulations of all insurers
under the policies required to be carried hereby;
(e) Not do or suffer anything to be done whereby the
premises, or any part thereof, may be encumbered by any mechanic's or
other similar lien, and if, whenever and as often as any mechanic's or
other similar lien is filed against the premises, or any part thereof,
purporting to be for or on account of any labor done or materials or
services furnished in connection with any work in, on or about the
premises done by, for, or under the authority of Lessee, Lessee shall
discharge the same of record within thirty (30) days after the date of
filing or provide security therefore which is reasonably acceptable to
Lessor. Lessee hereby acknowledges and gives notice to all other
parties that Lessor does not authorize or consent to and shall not be
liable for any labor or materials furnished Lessee or anyone claiming
by, through, or under Lessee upon credit, and that no mechanic's or
other similar lien for any such labor, services or materials shall
attach to or affect the reversionary or other estate of Lessor in and
to the premises or any part thereof;
(f) If at any time during the term of this Lease the
demised premises or any part thereof is damaged or destroyed by fire or
other casualty, to proceed with due diligence to repair, restore,
rebuild or replace said damaged or destroyed portion thereof to as good
condition as it was in immediately prior to such damage and
destruction, subject to such alterations as Lessee may elect to make as
otherwise permitted herein. Before commencing the work of repairing,
restoring, rebuilding or replacing the improvements as above provided,
there shall be delivered to Lessor performance and labor and material
payment bonds with respect to such work and in the full amount of the
contract covering such work made by the person which contracts to do
such work as principal and a surety company or companies reasonably
satisfactory to Lessor as surety and in form satisfactory to Lessor.
Said bonds shall name Lessor and Lessee as joint obligees. In the
event that any such damage or destruction occurs, all of the insurance
monies collected or payable on account of such damage or destruction on
or under the policy or policies of insurance maintained by Lessee
pursuant to the requirements hereof shall be payable jointly to Lessor
and
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Lessee as their interests appear, and thereafter endorsed by such other
parties to Lessee and to the person or persons performing such work or
providing materials therefore upon receipt by Lessor, from time to
time, of certificates signed by both Lessee and an architect or
engineer selected by Lessee and reasonably approved in writing by
Lessor (i) requesting payment of a specified amount of such funds and
directing to whom such amount shall be paid; (ii) stating that the
amount requested either has been paid by Lessee or is justly due to
contractors or other persons who have performed the work or provided
necessary materials in the repair and rebuilding of the premises and
improvements, and briefly describing such work and materials, and
stating that the requested amount does not exceed the fair value of
such work or materials; (iii) stating that, except for the amounts if
any stated in said certificate, there are no outstanding indebtedness
which are then due and payable for labor, wages, materials, supplies or
services in connection with the repair or rebuilding of the damaged
improvements which, if unpaid, might become the basis of a mechanic's
or other similar lien upon the premises or any part thereof; and (iv)
stating that no part of the several amounts paid or due, as stated in
said certificate, has been or is being made the basis for the
withdrawal of any monies in any previous or then pending application
pursuant to this Paragraph. All insurance monies not required to be
used for such purposes shall, upon receipt by Lessor of a certificate
by said architect or engineer that the work has been completed and that
no liens exist, become the property of Lessee. If the insurance monies
so collected by the Lessee are insufficient in amount to pay in full
the cost of all repairs, restorations, rebuilding and replacements of
said damaged or destroyed improvements, Lessee shall provide and
furnish all other monies necessary to complete fully all such repairs,
restorations, rebuilding and replacements;
(g) Anything in this Lease to the contrary
notwithstanding, that Lessor shall have the right at any time and from
time to time to withhold payment of endorsement of all or any part of
the insurance monies to Lessee, as generally provided in Paragraph 5(f)
hereof, in the event (i) Lessee is then in default in the payment of
rent or other charges as provided herein, (ii) Lessor has given notice
to Lessee of any other default on Lessee's part under this Lease, or
(iii) an act of default as described in Paragraph 7 hereof has
occurred. In the event Lessee shall cure the defaults specified above
or such defaults cease to exist, Lessor shall make such payments from
the insurance monies to Lessee in accordance with the provisions of
this Lease; provided, however, that if this Lease is terminated or
Lessor otherwise re-enters and takes possession of the premises without
terminating this Lease under the provisions of Paragraph 7 hereof,
Lessor may itself use such insurance monies for the payment of the
reasonable and necessary charges of such persons providing work and
materials for the repairs, restoration, rebuilding and replacements of
the damaged improvements;
(h) That the real property and all buildings,
improvements and fixtures located thereon at the time of execution of
this Lease, and all work and materials on the buildings and
improvements, and anything under this Lease which becomes, is deemed to
be, or constitutes a part of said premises and the manufacturing
facility
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thereon, and said manufacturing facility as repaired, rebuilt,
rearranged, restored or replaced by Lessee under the provisions of this
Lease, except as otherwise specifically provided herein, shall be and
remain or become immediately when erected or installed, as the case may
be, the absolute property of Lessor to the same extent as if the same
had been erected or installed prior to the execution of this Lease,
subject only to the express provisions of this Lease and as otherwise
noted in Paragraph 4(b), provided that no machinery or equipment or
other non-fixture personal effects of the Lessee purchased and
installed on the premises by Lessee and no part of which is paid for
from funds of Lessor or from the EDA Grant shall be deemed part of the
premises;
(i) To keep and preserve the demised premises free from
nuisance and not permit the use of the same or any part thereof for
other than industrial or manufacturing purposes as described herein for
the Project; and not permit the same to be used for any purpose
forbidden by law, ordinance or regulation, or for any purpose which
would be in violation of the Special Terms and Conditions or the
General Terms and Conditions of the said EDA Grant, including the
governmental regulations referred to therein, all of which terms and
conditions are hereby incorporated by reference;
(j) To pay all utility charges incurred in respect of
the premises and Lessee's occupation thereof, and if not paid in due
time and if paid by Lessor at Lessor's sole option, to reimburse Lessor
for such amounts paid, including late charges, plus interest thereon at
the highest lawful rate in the State of Iowa.
(k) Not to sublet or assign Lessee's interest or any
part thereof in this Lease or the demised premises without the prior
written consent of Lessor, which said consent shall not be unreasonably
withheld; and not to alienate or permit to be alienated its interest in
the demised premises (which shall be deemed to include but not limited
to the sale, lease, rent, option or mortgage thereof, provided,
however, that Lessee shall have the absolute right to assign Lessee's
interest in the lease to any corporation or other entity in connection
with any acquisition of substantially all of the assets of Lessee,
acquisition of 80% or more of the stock of Lessee or in connection with
any merger involving Lessee; subject to approval by the United States
Department of Commerce Economic Development Administration; which
consent shall not be unreasonably withheld;
(l) Not to allow trash, refuse, waste material or
garbage to accumulate or remain on the premises and to deposit the same
in appropriate containers and arrange for the removal thereof
periodically as required by law or ordinance;
(m) Not to initiate any proceedings of any kind
whatsoever to dissolve or liquidate Lessee or its corporate status
without securing the prior written consent thereto of Lessor;
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(n) To permit Lessor or Lessor's agents to enter the
premises at any reasonable time after giving reasonable notice during
normal business hours for the purpose of inspection for conformity to
the express requirements of this Lease or making repairs to the
premises or to show to prospective purchasers or tenants, subject to
the express conditions hereof, and at other times upon reasonable
notice to lessee;
(o) To maintain at all times during the term of this
Lease public liability insurance (including coverage for all losses
whatsoever arising from the ownership, maintenance, operation or use of
any automobile, truck or other motor vehicle), under which Lessor shall
be named as an additional insured, properly protecting and indemnifying
Lessor in an amount not less that $500,000 for injury, including death,
to any one person, not less than $1,000,000 for personal injuries,
including death, in any one accident or occurrence, and not less than
$500,000 for property damage in any one accident or occurrence. Said
policy or policies of insurance shall contain a provision that such
insurance may not be cancelled by the issuer thereof with not less than
thirty (30) days' advance written notice to Lessor and Lessee. Such
policy or policies or copies or certificates thereof shall be furnished
to Lessor on a current basis at all times during the term of this
Lease;
(p) To keep the demised premises, and all buildings and
improvements thereon, insured against loss or damage by fire, lightning
and all other risks covered by the extended coverage insurance
endorsement then in use in the State of Iowa in an amount equal to the
full insurable value thereof, with such insurance company or companies
authorized to do business in the State of Iowa as may be selected by
Lessee and reasonably approved in writing by Lessor, and against loss
or damage by water risks as and when and in such amounts as such
insurance is obtainable and generally carried by owners of industrial
and manufacturing plants in Iowa. The term "full insurable value"
shall mean, to the maximum extent possible, the full actual replacement
cost of all improvements on the premises. At all times during the term
of this Lease, originals or copies of certificates of the policies
provided for in this Paragraph, each bearing notations evidencing
payment of the premiums or other evidence of such payment satisfactory
to Lessor, shall be delivered by Lessee to Lessor. All policies of
such insurance, and all renewals thereof, shall name Lessor and Lessee
as insureds as their respective interests may appear and shall contain
a provision that such insurance may not be cancelled by the insurer
thereof without at least thirty (30) days' written notice to Lessor and
Lessee. The proceeds of any such policies shall be used an applied in
the manner and to satisfy the various obligations set forth in this
Lease;
(q) That this Lease is intended to be a net lease and
that the payment of Lease Payments as provided herein is in addition to
all other obligations imposed herein upon Lessee;
(r) If default be made in the payment of Lease Payments
or any part thereof or of any other payment required to be made to
Lessor by the terms hereof, on
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the date due, and after the expiration of all applicable cure periods,
or if this Lease is terminated by any method herein provided, to quit
and surrender to Lessor or Lessor's agents peaceful possession of the
premises upon demand for possession for nonpayment of Lease Payments as
aforesaid or upon the effective date of termination after notice
thereof, whichever is applicable; and in the event of Lessee's failure
to surrender possession as aforesaid, or if the premises become vacant
during the term of this Lease, then Lessor may at any time thereafter
resume possession thereof by any lawful means, and remove Lessee and
Lessee's effects by self-help or proceedings for possession or unlawful
detainer, or otherwise, and in any such event Lessee shall pay all
costs and attorneys' fees incurred by Lessor in regaining possession
and/or asserting Lessor's rights under this Lease; and
(s) At the termination of this Lease, by whatever
method herein provided, to surrender peaceful possession of said
premises in as good condition as the same were received, usual wear and
tear and providential destruction excepted.
6. Option to Purchase. Lessor hereby grants to Lessee the
limited right to purchase the Project and the above described property
and appurtenances at any time prior to the expiration of one month
after the expiration of the original Lease Term plus the five (5) year
renewal of said lease, upon the terms and conditions hereinafter set
forth:
(a) The purchase price for said Project shall be ONE
MILLION TWO HUNDRED EIGHTY-FIVE THOUSAND NINE HUNDRED FIFTY-FIVE
DOLLARS AND NO CENTS ($1,285,955.00); plus (1) any other sums or
expenses of any type in connection with said property which have or had
accrued to the account of Lessee or were otherwise properly payable by
Lessee according to the terms of this Lease but were for any reason
paid by Lessor; plus (2) the total of all reasonable costs and expenses
incurred or to be incurred by Lessor in the closing of such sale to
Lessee, excluding Lessor's legal fees, but including but not limited to
the cost of all title examinations and title insurance and other
reasonable and necessary closing expenses. Said total sum, determined
as provided in this Paragraph, shall be paid in full and in cash or by
cashier's check on the date of closing of said purchase.
(b) This option shall be in effect for the term of this
Lease, including any renewal or extension thereof, and for one month
thereafter. Notice of election by Lessee to exercise this option shall
be in writing delivered or mailed as provided in Paragraph 8 hereof so
to reach Lessor prior to the time of expiration of this option. As
long as notice of exercise is given prior to expiration of the option,
closing may occur after said expiration.
(c) In the event this option is so exercised by Lessee,
Lessor shall, within thirty (30) days thereafter, provide to Lessee a
commitment for the issuance of title insurance, certified to the date
of Lessee's said notice, showing marketable title
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to the premises to be vested in Lessor, according to the Title
Examination Standards of the Iowa Bar, free and clear of all liens and
encumbrances of record, except any encumbrances which may be satisfied
in full by Lessor on or before the date of closing, and except for the
special exceptions, if any, noted in Paragraph 1 of this Lease, and
except for any lien or encumbrance placed or suffered to be placed upon
the premises by Lessee after the date of this Lease, and except for any
other lien or encumbrance otherwise permitted or required according to
the terms of this Lease, and except for the lien for any taxes thereon
which may attach or may have attached after the date of this Lease.
Lessee shall thereafter have a period of fifteen (15) days to examine
said commitment and to determine if defects are noted therein in the
title of Lessor. If defects are found to exist in the title of Lessor
which prevent absolute compliance with the requirements of this
Paragraph, then Lessor shall at Lessor's expense obtain the removal or
correction of any such noted defect, if the same can be done within six
months after being so noted. If defects of title are noted which are
not capable of correction or removal within such six month period, then
Lessee shall have the option of avoiding the obligation to purchase, or
of completing the purchase of said premises, with reduction in the
price therefore by an amount sufficient to remedy such defect in title
or to compensate Lessee for the reduction in value of the premises
attributable to such defect, as Lessee may determine.
(d) The property shall be conveyed by special corporate
warranty deed, properly executed and acknowledged by officials of
Lessor and delivered to Lessee, free and clear of all liens and
encumbrances except as provided herein.
(e) In the event of exercise of this option by Lessee,
the sale and conveyance of said property shall be closed at the office
of Lessor in Cedar Falls, Iowa, on the tenth business day immediately
following expiration of the time granted to Lessee for examination of
said commitment, or on the tenth business day immediately following the
correction of noted defects of title by Lessor, or upon the tenth
business day immediately following Lessee's notification to Lessor or
Lessee's intention to waive any noted defects in title, as the case may
be. At the time of closing, all papers, documents and final payments
provided herein shall be exchanged between the parties. Lessee shall
at said time be given full and absolute possession of said premises,
without further interference or claim of Lessor or any person claiming
through Lessor.
(f) If this Option is not exercised by notice in
writing as provided above prior to midnight on the appropriate day of
expiration of the same, said Option shall be of no further force or
effect, and the consideration paid therefore shall be retained by
Lessor. Proof of expiration of this Option without exercise by Lessee
may be made by recording of Lessor's affidavit, reciting the failure of
Lessee to exercise said Option and to complete the purchase of said
property in the manner provided herein and further reciting the
expiration of said Option, and by recording of the receipt issued by
the United States Postal Service as proof of mailing by certified mail
of a copy of such affidavit at least ten days prior to the date of
recording the same. Proof of actual receipt of such affidavit by
Lessee shall not be required.
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7. Events of Default. (a) If any one or more of the following
events shall occur and be continuing, it is hereby defined as and
declared to be and to constitute an Event of Default of "default"
hereunder:
(1) Default in the due and punctual payment of any
Lease Payment by Lessee pursuant to Paragraph 3 hereof, including
applicable late payment penalty or penalties, which default shall
continue for five (5) days after Lessor has given Lessee written notice
specifying such nonpayment; or
(2) Default in the due observance or performance of any
other covenant, agreement, obligation or provision of this Lease, or
for the applicable provisions of the Special Terms and Conditions or
General Terms and Conditions of said EDA Grant, on Lessee's part to be
observed or performed, and such default shall continue for 60 days
after Lessor has given Lessee written notice specifying such default or
such longer period as shall be reasonably required to cure such
default; provided that (1) Lessee has commenced such cure within said
60-day period, and (2) Lessee diligently prosecutes such cure to
completion; or
(3) Lessee shall (i) admit in writing its inability to
pay its debts as they become due; or (ii) file a petition in bankruptcy
or for reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under the Bankruptcy Code as
now or in the future amended or any other similar present or future
Federal or State statute or regulation, or file a pleading asking for
such relief; or (iii) make an assignment for the benefit of its
creditors; or (iv) consent to the appointment of a trustee, receiver or
liquidator for all or a major portion of its property or shall fail to
have vacated or set aside the appointment of any trustee, receiver or
liquidator which was made without Lessee's consent or acquiescence; or
(v) be finally adjudicated as bankrupt or insolvent under any Federal
or State law; or (vi) be subject to any proceedings, or suffer the
entry of a final and nonappealable court order, under any Federal or
State law, appointing a trustee, receiver or liquidator for all or a
major part of its property or ordering the winding-up or liquidation of
its affairs, or approving a petition filed against it under the United
States Bankruptcy Code, as now or in the future amended, which order or
proceeding, if not the subject of Lessee's consent, shall not be
dismissed, vacated, denied, set aside or stayed within 60 days after
the day of entry or commencement; or (vii) suffer a writ or warrant of
attachment or any similar process to be issued by any court against all
or any substantial portion of its property, and such writ or warrant of
attachment or any similar process is not contested, stayed or released
within 60 days after the final entry, or levy after any contest if
finally adjudicated or any stay is vacated or set aside; or
(4) Lessee shall vacate or abandon the Project; or
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(5) Violation of any provision, or commission or
omission of any act which causes or constitutes a violation of any
provision, of the Special Terms and Conditions or General Terms and
Conditions of said EDA Grant, if not timely cured to the satisfaction
of the EPA.
(b) If any Event of Default specified in Paragraph 7(a)
hereof shall have occurred and be continuing, then Lessor may, at
Lessor's election, then or at any time thereafter, and while such
default shall continue, take any one or more of the following actions:
(1) Cause all Lease Payments for the remainder of the
Lease Term to become due and payable; or
(2) Give Lessee written notice of intention to
terminate this Lease on a date specified in such notice, which date
shall not be earlier than 30 days after such notice is given, and if
all defaults have not then been cured, on the date so specified,
Lessee's rights to possession of the Project shall cease and this Lease
shall thereupon be terminated, and Lessor may reenter and take
possession of the Project; or
(3) Without terminating this Lease, reenter the Project
or take possession thereof pursuant to legal proceedings or pursuant to
any right of self-help or notice provided for by law, and having
elected to reenter or take possession of the Project without
terminating this Lease, Lessor shall use reasonable diligence to relet
the Project, or parts thereof, for such term or terms and at such
rental and upon such other provisions and conditions as Lessor may deem
advisable, with the right to make alterations and repairs to the
Project, and no such reentry or taking of possessing of the Project by
Lessor shall be construed as an election on Lessor's part to terminate
this Lease, and no such reentry or taking of possession by Lessor shall
relieve Lessee of its obligation to pay Lease Payments or Additional
Payments (at the time or times provided herein), or of any of its other
obligations hereunder, all of which shall survive such reentry or
taking of possession, and Lessee shall continue to pay the Lease
Payments specified herein until the end of the Lease Term, whether or
not the Project shall have been relet, less the net proceeds, if any,
of any reletting of the Project after deducting of all of Lessor's
reasonable expenses of or in connection with such reletting, including
without limitation all repossession costs, brokerage commissions, legal
expenses, expenses of employees, alteration costs and expenses of
preparation for reletting.
Having elected to reenter or take possession of the Project
without terminating this Lease, Lessor may, by notice to Lessee given
at any time thereafter while Lessee is in default in the payment of
Lease Payments or in the performance of any other obligation hereunder,
elect to terminate this Lease on a date to be specified in such notice,
which date shall be not earlier than 30 days after reentry under
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Subparagraph (b)(3) above, and if all defaults shall not have then been
cured, on the date so specified this Lease shall thereupon be
terminated. If in accordance with any of the foregoing provisions of
this Paragraph 7 Lessor shall have the right to elect to reenter and
take possession of the Project, Lessor may enter and expel Lessee and
those claiming through or under Lessee and remove the property and
effects of both either (forcibly if necessary) without being guilty of
any manner of trespass and without prejudice to any remedies for
arrears of rent or for preceding breach of covenant. Lessor may take
whatever action at law or in equity which may appear necessary or
desirable to collect rent then due and thereafter to become due, or to
enforce performance and observance of any obligation, agreement or
covenant of Lessee hereunder.
Notwithstanding any of the foregoing, if Lessor elects to
reenter or take possession of the Project and relet the same, in such
reletting Lessor shall not adversely affect any grant or loan made to
Lessor, the City of Cedar Falls, Iowa, by the United States Department
of Commerce Economic Development Administration, by Flood Relief
Project Award No. 05-19-61126.
(c) Lessee covenants and agrees with Lessor that
Lessee's obligations hereunder shall survive the cancellation and
termination of this Lease, for any cause, and that Lessee shall
continue to make the Lease Payments required hereunder and perform all
other obligations specified herein, all at the time or times provided
herein; provided, however, that upon the payment of all Lease Payments
required hereunder, Lessee's obligations under this Lease shall
thereupon cease and terminate in full.
(d) The rights and remedies reserved by Lessor and
Lessee hereunder and those provided by law shall be construed as
cumulative and continuing rights. No one of them shall be exhausted by
the exercise thereof on one or more occasions. Lessor and Lessee shall
each be entitled to specific performance and injunctive or other
equitable relief for any breach or threatened breach of any of the
provisions hereof, notwithstanding availability of an adequate remedy
at law, and each party hereby waives the right to raise such defense in
any proceeding in equity.
(e) No waiver of any breach of any covenant or
agreement herein contained shall operate as a waiver of any subsequent
breach of the same covenant or agreement or as a waiver of any breach
of any other covenant or agreement, and in case of a breach by Lessee
of any covenant, agreement or undertaking by Lessee, Lessor may
nevertheless accept from Lessee any payment or payments hereunder
without in any way waiving Lessor's right to exercise any of its rights
and remedies as provided herein with respect to any such default or
defaults of Lessee which were in existence at the time when such
payment or payments were accepted by Lessor.
(f) In the event either party should default under any
of the provisions hereof and the other party should employ attorneys or
incur other expenses for the
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collection of the Lease Payments or the enforcement of performance of
any obligation or agreement on the part of the defaulting party, the
defaulting party will on demand pay to the non-defaulting party the
reasonable fee of such attorneys and such other expenses so incurred.
(g) If Lessee shall fail to make any payment or to keep
or perform any of its obligations as provided herein, then Lessor may
(but shall not be obligated so to do) upon the continuance of such
failure on Lessee's part for 60 days after notice of such failure is
given Lessee by Lessor, and without waiving or releasing Lessee from
any obligation hereunder, as an additional but not exclusive remedy,
make any such payment or perform any such obligation, and all sums so
paid by Lessor and all necessary incidental costs and expenses incurred
by Lessor in performing such obligations shall be deemed Additional
Payments and shall be paid be Lessee to Lessor on demand, and if not so
paid by Lessee, Lessor shall have the same rights and remedies provided
for in Paragraph 7(b) hereof in the case of default by Lessee in the
payment of Lease Payments.
8. Administrative and Compliance Requirements.
(a) The Lessee shall maintain books, records, documents
and other evidence pertaining to all costs and expenses incurred and
revenues acquired under this Agreement.
(b) Audit and Inspection. At any time during normal
business hours and as frequently as is deemed necessary, the Lessee
shall make available to the Lessor and the Economic Development
Administration or their agents for their examination, all of its
records pertaining to all matters covered by this Agreement and permit
these agencies to audit, examine, make excerpts, or transcripts from
such records, contract, invoices, payrolls, personnel records,
conditions of employment, and all other matters covered by this
Agreement.
(c) Retention of Records. All records in the
possession of the Lessee pertaining to this Agreement shall be retained
by the Borrower for a period of three (3) years beginning with the date
upon which this Agreement is issued. All records shall be retained
beyond the three year period if audit findings have not been resolved
within that period or if other disputes have not been resolved.
(d) Civil Rights Provision. Lessee will comply with
all applicable Civil Rights provisions.
9. Mutual Covenants. It is mutually agreed:
(a) That any notice provided for herein may be given to
the party entitled thereto by personal service or by certified mail
addressed as follows:
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To Lessor: To Lessee:
Mayor Chief Executive Officer
City of Cedar Falls Clay Equipment Corporation
220 Clay Street ---- Savannah Park Road
Cedar Falls, Iowa 50613 Cedar Falls, Iowa 50613
and
(b) That this Lease shall be binding upon the parties
hereto and their successors and assigns, subject to the restrictions
herein contained as to subletting or assignment by Lessee;
(c) That the terms and conditions of this Lease,
including but not limited to the Lease Term, the Monthly Lease
Payments, and the option to purchase the premises, are subject to the
review and approval by the EDA, as provided in the Special Terms and
Conditions of the EDA Grant; and that, as of the initiation of the
Lease, there are in effect in the locality where the project is
situated leases for 10 years at the initial rental rate stated in
Paragraph 3(a)(A) hereof; and
(d) That the parties shall execute and acknowledge a
Memorandum of Lease, stating the existence of this Lease, the purchase
option, and the description of the leased premises, and shall record
the same in the office of the Recorder of Deeds for Black Hawk County,
Iowa.
IN WITNESS WHEREOF, the parties have caused this Lease to be
executed in duplicate by their respective officers as of the day and
year first above written.
LESSOR: LESSEE:
By: /s/Ed Stachovic By: /s/Leonard J. Hare
---------------------------- -----------------------------
Mayor Chief Executive Officer
Attest: Attest:
/s/Gary L. Hesse /s/James Rhoads
- --------------------------------- ----------------------------------
City Clerk Secretary
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APPROVAL BY EDA
The foregoing Industrial Lease and Option, and the terms and conditions
thereof, is hereby approved by the United States Department of Commerce
Economic Development Administration, as of this 19th day of April,
1995.
UNITED STATES DEPARTMENT OF
COMMERCE, ECONOMIC DEVELOPMENT
ADMINISTRATION
By: /s/Charles Lee
----------------------------
for Regional Director
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4/5/95
AGREEMENT
THIS AGREEMENT is made between the City of Cedar Falls,
Iowa, ("City") and Clay Equipment Corporation, an Iowa corporation
("Clay"), in connection with a certain Industrial Lease and Option
entered into between the City and Clay contemporaneously herewith.
IN CONSIDERATION of Clay's execution and performance of the
Industrial Lease and Option and to create an incentive therefore, the
parties agree as follows:
1. The City shall make a series of development incentive
payments to Clay upon the conditions set forth in Paragraph 2 of this
Agreement on June 1st of each year of the term of the Industrial Lease
and Option Agreement referred to above. The amount of each such
payment shall be equal to the amount actually assessed to and paid by
Clay as property tax on machinery and equipment installed in the
premises described in the Industrial Lease, but shall not exceed the
amount of $40,000 in any fiscal year.
2. No such payment shall be owing from the City to Clay in
any year unless Clay shall then be in full compliance with each of the
following conditions precedent to-wit:
(a) Clay and the City shall have executed the
Industrial Lease Agreement, entered into and remaining in continuous
occupancy of the premises in the conduct of its business operations,
and shall not be in substantial breach of the Industrial Lease
Agreement.
(b) As of May 1st of each year, commencing with May 1,
19---, Clay shall provide the City satisfactory proof of having been
lawfully assessed local property taxes for machinery and equipment
installed in the premises and having paid such property taxes in full
for the prior fiscal year.
3. The terms of this Agreement shall extend through the
additional five year term of the Industrial Lease in the event that the
option to renew is exercised by the City under Paragraph 2(b) thereof
including the obligation to pay Clay after the term expires for
obligations accrued during the term.
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4. This Agreement shall be binding upon the successors and
assigns of the parties.
Executed this 17th day of April, 1995.
LESSOR: LESSEE:
CITY OF CEDAR FALLS CLAY EQUIPMENT CORPORATION, an
Iowa Corporation
By: /s/Ed Stachovic By: /s/Leonard J. Hare
---------------------------- -----------------------------
Mayor Chief Executive Officer
Attest: Attest:
/s/Gary L. Hesse /s/James Rhoads
- --------------------------------- ----------------------------------
City Clerk Secretary
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