EXHIBIT 10.5
INDUSTRIAL BUILDING LEASE
THIS LEASE is made this ______ day of May, 1997, by and between KENNETH A.
HENDRICKS and DIANE M. HENDRICKS, doing business as Hendricks Commercial
Properties ("Landlord") and AMERICAN BUILDERS & CONTRACTORS SUPPLY CO., INC.
("Tenant"), who hereby mutually covenant and agree as follows:
I. GRANT, TERM, DEFINITIONS AND BASIC LEASE PROVISIONS
1.1 Grant. Landlord, for and in consideration of the rents herein reserved
and of the covenants and agreements herein contained on the part of Tenant to be
performed, hereby leases to Tenant, and Tenant hereby lets from Landlord, the
real estate consisting of approximately ________ square feet of area, commonly
known as ____________________________________________________________________
_____________________________________________________________________________
and legally described on an exhibit which is attached hereto, identified as
Exhibit A, together with all improvements now located thereon (consisting of
approximately ________________ square feet in area), or to be located thereon
during the term of this Lease, together with all appurtenances belonging to or
in any way pertaining to the said premises (such real estate, improvements and
appurtenances hereinafter sometimes jointly or severally, as the context
requires, referred to as "leased Premises").
1.2 Term. The term of this Lease shall commence on June 1, 1997,
hereinafter sometimes referred to as "Commencement Date"), and shall end on
_________________________, unless earlier terminated as herein set forth.
1.3 Basic Lease Provisions.
(a) Purpose (See Section 3.1): a building material warehouse and
distribution center, and related lawful purposes.
(b) Initial Annual Base Rent (See Section 4.1): for the period from
June 1, 1997 through May 31, 1998.
(c) Increases in Annual Base Rent: The Rent reserved to Landlord under
Section 1.3(b) is subject to adjustment on June 1 of each fiscal year commencing
on June 1, 1998, as provided in Section 4.
(d) Security Deposit (See Section 20.1): _______________
(e) Form of Insurance (See Article VI): The insurance specified in
Section 6.2 shall comply with the provisions of Section 6.3.
(f) Payee's Address (See Sections 4.1 and 4.2):
One ABC Parkway
Beloit, Wisconsin 53511
(f) Tenant's Address (for notices) (See Section 21.4):
One ABC Parkway
Beloit, Wisconsin 53511
(g) Landlord's Address (for notices) (See Section 21.4):
One ABC Parkway
Beloit, Wisconsin 53511
II. POSSESSION
2.1 Possession. Tenant is already in possession of the Leased Premises.
This Lease replaces and supersedes the existing lease between the parties.
Tenant accepts the Leased Premises "AS IS, WHERE IS" with all faults. Except as
set forth herein., LANDLORD MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND,
EXPRESS OR IMPLIED, CONCERNING THE PROPERTY, OR ANY PORTION OF IT, INCLUDING
WITHOUT LIMITATION AS TO THE FOLLOWING: (A) THE CONDITION, VALUE, NATURE OR
QUALITY OF THE LEASED PREMISES, INCLUDING ANY CONSTRUCTION ON THE LEASED
PREMISES AND ANY MATERIALS INCORPORATED INTO THE IMPROVEMENTS THEREOF; (B) THE
SOIL, WATER OR GEOLOGY RELATING TO LEASED PREMISES; (C) ANY INCOME DERIVED OR TO
BE DERIVED FROM THE LEASED PREMISES; (D) THE SUITABILITY OF THE LEASED PREMISES
TO ANY ACTIVITIES OR USES WHICH TENANT OR OTHERS MAY WISH TO CONDUCT ON OR
RELATING TO THE LEASED PREMISES OR ITS OPERATION WITH ANY LAW, ORDINANCE, RULE,
REGULATION, OR THE STATUS OF ANY PERMITS OR APPROVALS RELATING TO OR REQUIRED IN
CONNECTION WITH THE LEASED PREMISES.
III. PURPOSE
3.1 Purpose. The Leased Premises shall be used and occupied only for the
Purpose set forth in Section 1.3(a) hereof, except that no such use shall (a)
violate any certificate of occupancy or law, ordinance or other governmental
regulation, or any covenants, conditions or restrictions of record, in effect
from time to time affecting the Leased Premises or the use thereof, (b) cause
injury to the improvements, (c) cause the value or Usefulness of the Leased
Premises or any part thereof to diminish, (d) constitute a public or private
nuisance or waste, or (e) authorize Tenant to use, treat, store or dispose of
hazardous or toxic materials on the Leased Premises, or to render the insurance
on the Leased Premises void or the insurance risk more hazardous.
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3.2 Prohibition of Use. If the use of the Leased Premises should at any
time during the lease term be prohibited by law or ordinance or other
governmental regulation, or prevented by injunction, this Lease shall not be
thereby terminated, nor shall Tenant be entitled by reason thereof to surrender
the Leased Premises or to any abatement or reduction in rent, nor shall the
respective obligations of the parties hereto be otherwise affected.
IV. RENT
4.1 Annual Base Rent. Beginning with the Commencement Date until May 31,
1998, Tenant shall pay Annual Base Rent as set forth in Section 1.3(a) hereof
payable monthly in advance in installments as set forth in said Section. Annual
Base Rent, additional rent and other charges payable, hereunder (collectively
"Rent") Shall be paid to or upon the order of Payer at the Payee's Address.
Landlord shall have the right to change the Payee or the Payee's Address by
giving written notice thereof to Tenant. If Tenant occupies the Leased Premises
for the purpose of conducting business therein prior to the Commencement Date,
Tenant shall pay Rent on a pro rata basis from the date of occupancy to the
Commencement Date. All payments by Tenant shall be made in advance, without
notice, deduction, set off, discount or abatement, in lawful money of the United
States.
4.2 Increases in Annual Base Rent. The Rent reserved to Landlord under
Section 4.1 is subject to adjustment on June 1 of each calendar year commencing
on June 1, 1998, as provided in this Section 4.2. The amount of rent adjustment,
if any, shall be ascertained and fixed in the following manner:
(a) For the purposes of this Section 4.2, the following definitions
shall apply:
(i) "Index" shall mean "The New Consumer Price Index for All
Urban Consumers, United States National Index, Subgroup 'All Items' (1967 =
100)", and published by the United States Department of Labor, Bureau of
Labor Statistics. If at any rental adjustment date the Index is not
published in the same format as recited herein, the parties shall
substitute any official index published by the Bureau of Labor Statistics,
or successor or similar governmental agency, as may then be in existence
and shall be most nearly equivalent thereto.
(ii) "Base Month Index" shall mean the Index in effect as of
March, 1997.
(iii) "Anniversary Month" shall mean March of the calendar year
following the year in which the term of this Lease commences and each
successive March thereafter during the term of this Lease.
(iv) "Percentage Increase" shall mean the percentage equal to
the fraction, the numerator of which shall be the Index in the Anniversary
Month less the Base Month Index, and die denominator of which shall be the
Base Month Index.
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(b) The Rent shall be increased by the Percentage Increased.
(c) On or before June 1 of each succeeding year and after the
increase in the amount of Rent for each year under this Section has been thus
determined, Landlord shall provide Tenant a written statement ("Statement of
Increase") which shall set forth: (1) the Index on the Anniversary Month
preceding the notice, (2) the Base Month Index, (3) the Percentage Increase, (4)
the total increase in the annual rental rate attributable to this Article, and
(5) any other adjustments or increases required or permitted under other
provisions of this Lease Agreement.
(d) On June 1 and following Tenant's receipt of the Statement of
Increase, Tenant shall pay the amount of the Rent as increased pursuant to this
Section. Thereafter, monthly rental payments by Tenant shall reflect such
increases until receipt of a subsequent Statement of Increase.
4.3 Lock Box. Landlord may from time to time designate a lock box
collection agent for the collection of Rent due Landlord. In such event, the
date of payment shall be the date of receipt by the lock box collection agent of
such payment (or the date of collection of any such sum if payment is made in
the form of a negotiable instrument thereafter dishonored upon presentment);
however, for the purposes of this Lease, no such payment or collection shall be
deemed "accepted" by Landlord if an Event of Default shall then have occurred,
and if landlord thereafter remits a check payable to Tenant in the amount
received by the lock box collection agent within twenty-one (21) days after the
amount sent by the Tenant is received by the lock box collection agent or, in
the case of a dishonored instrument, within twenty one (21) days after
collection. Neither the negotiation of Tenant's negotiable instrument by the
lock box collection agent, nor the possession of the funds by Landlord during
the twenty-one (21) day period, nor the return of any such sum to Tenant shall
be deemed to be inconsistent with the rejection of Tenant's tender of such
payment for all purposes as of the date of Landlord's lock box collection
agent's receipt of such payment (or collection), nor shall any of such events be
deemed to be a waiver of any breach by Tenant of any terms, covenant or
conditions of this Lease nor a waiver of any of Landlord's rights or remedies.
4.4 Interest on Late Payments. Each and every installment of Rent which
shall not be paid when due shall bear interest at the highest rate then payable
by Tenant in the state in leased Premises are located or, in the absence of such
a maximum rate, at a rate per which the Leased Premises are located or, in the
absence of such a maximum rate, at a rate per annual equal to two percent (2%)
in excess of the announced base rate of interest of American National Bank and
Trust Company of Chicago in effect on the due date of such payment, from the
date when the same is payable under the terms of this Lease until the same shall
be paid.
V. IMPOSITIONS
5.1 Payment by Tenant. Tenant shall pay as additional Rent for the Leased
Premises, all taxes and assessments, general and special, water rates and all
other impositions, ordinary and extraordinary, of every kind an nature
whatsoever, which may be levied, assessed, charged or imposed during the term of
the Lease upon the Leased Premises, or any part thereof, or upon any
improvements at any time situated thereon, including without limitation, any
assessment by any
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association of owners of property in the complex of which the Leased Premises
are a part ("Impositions"); provided, however, that Impositions levied against
the Leased Premises shall be prorated between Landlord and Tenant as of the as
of the expiration of the Lease term for the last year of the Lease term (and
shall be paid by Tenant upon such expiration based on Landlord's reasonable
estimate thereof). Impositions shall also include fees and costs incurred by
Landlord during or prior to the Lease term for the purpose of contesting or
protesting tax assessments or rates, to the extent such fees and costs relate to
savings realized during the term of the Lease and any extension thereof. Any
Tenant shall be obligated to pay all Impositions assessed with respect to the
periods of time which constitute the term of this Lease.
5.2 Alternative Taxes. If at any time during the term of this Lease the
method of taxation prevailing at the commencement of the term hereof shall be
altered so that my new tax, assessment, levy imposition or charge, or any part
thereof, shall be measured by or be based in whole or in part upon the Lease, or
the Leased Premises, or the Annual Base Rent, additional rent or other income
therefrom and shall be imposed upon the Landlord, then all such taxes,
assessments, levies, impositions, or charges, or the part thereof, to the extent
that they are so measured or based, shall be deemed to be included within the
term Impositions for the purposes hereof to the extent that such Impositions
would be payable if the Leased Premises were the only property of Landlord
subject to such Impositions, and Tenant shall pay and discharge the same as
herein provided in respect of the payment of Impositions. There shall be
excluded from Impositions all federal income taxes, state and local net income
taxes, federal excess profit taxes, franchise, capital stock and federal or
state estate or inheritance taxes of Landlord.
5.3 Payment of Impositions and Insurance. Tenant shall pay monthly to
Landlord on the first day of each and every month of the Lease term, a sum equal
to one twelfth (1/12) of the last ascertainable amount (or at Landlord's
election, if Landlord's interest hereunder is subject to the lien of a mortgage
or trust deed, a sum equal to one twelfth (1/12) of the mortgagee's estimate of
the current amount) of Impositions and, also, insurance premiums as required
under the terms of Article VI of this Lease), which monthly payment shall be
held by Landlord and shall be used to the extent thereof, to pay the same as the
same become due and payable. The payment shall not limit or alter Tenant's
obligation to pay Impositions (or premiums); provided, however, that said
payment shall be fully utilized for the payment of Impositions (or premiums).
The amount of the deposits shall be readjusted annually, on the first day of the
month after the tax bills showing the actual amount of the taxes (or premiums).
Tenant shall not be entitled to interest on said payment.
5.4 Evidence of Payment. Tenant shall deliver to Landlord duplicate
receipts and canceled checks, or photocopies thereof showing the payments of all
Impositions and insurance premiums, within thirty (30) days after respective
payments evidenced thereby.
5.5 Right to Contest. Tenants shall be required to pay any Imposition or
charge upon or against the Leased Premises, or any part thereof, or the
improvements at any time situated thereon, even though Tenant shall, in good
faith and with due diligence, contest the same or the validity thereof by
appropriate legal proceeding unless such procedure shall have the effect of
preventing the collection of the Imposition or charge so contested; provided
that pending any such legal proceedings
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which stay the payment of such Imposition, Tenant shall give Landlord such
security as may be deemed satisfactory to Landlord to insure payment of the
amount of the Imposition or charge, and all interest and penalties thereon. If,
at any time during the continuance of such contest, the Leased Premises or any
part thereof is, in the judgment of Landlord, in imminent danger of being
forfeited or lost as a result of non-payment of the Imposition, Landlord may use
such security for the payment of such Imposition.
VI. RISK ALLOCATION AND INSURANCE
6.1 Allocation of Risks. The parties desire, to the extent permitted by
law, to allocate certain risks of personal injury, bodily injury or property
damage, and risks of loss of real or personal property by reason of fire,
explosion or other casualty, and to provide for the responsibility for insuring
those risks. It is the intent of the parties that, to the extent any event is
insured for or required herein to be insured for, any loss, cost, damage or
expense arising from such event, including, without limitation, the expense of
defense against claims or suits, be covered by insurance, without regard to the
fault of Tenant, its officers, employees or agents ("Tenant Protected Parties"),
and without regard to the fault of Landlord, its partners, shareholders,
members, agents, directors, officers and employees ("Landlord Protected
Parties"). As between Landlord Protected Parties, such risks are allocated as
follows:
(a) Tenant shall bear the risk of bodily injury, personal injury or
death, or damage to the property of third persons, occasioned by events
occurring on or about the Leased Premises, regardless of the party at fault.
Said risk shall be insured as provided in Section 6.2(a).
(b) Tenant shall bear the risk of damage to the improvements on the
Leased Premises and to Tenant's contents, trade fixtures, machinery, equipment,
furniture and furnishings in the Leased Premises arising out of loss by the
events to be insured against pursuant to Section 6.2(b), (d), (e) and (g).
6.2 Tenant's Insurance. Tenant shall procure and maintain policies of
insurance, at its own cost and expense, insuring:
(a) The Landlord Protected Parties (as "named insureds"), and
Landlord's mortgagees, if any, of which Tenant is given written notice, and
Tenant Protected Parties, from all damages, losses, costs and expenses, claims,
demands or actions made by or on behalf of any person or persons, firm or
corporation and arising from, related to or connected with the Leased Premises,
for bodily injury to, or personal injury to, or death of any person, or more
than one (1) person, or for damage to property and the amount of such insurance
shall be not less than $3,000,000.00 single limit per occurrence/$_________ in
the aggregate. Said insurance shall be written on an "occurrence" basis and not
on a "claims made" basis. Landlord shall have the right, exercisable by giving
written notice thereof to Tenant, to require Tenant to increase such limit if,
in Landlord's reasonable judgment, the amount thereof is insufficient to protect
the Landlord Protected Parties and Tenant Protected Parties from judgments which
might result from such damages, losses, costs or expenses, claims, demands or
actions.
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(b) The improvements at any time situated upon the Leased Premises
against loss or damage by fire, lightning, wind storm, hail storm, aircraft,
vehicles, smoke, explosion, sewer back-up, riot or civil commotion as provided
by the Standard Fire and Extended Coverage Policy and all other risks of direct
physical loss as insured against under Special Form ("all risk" coverage). The
insurance coverage shall be for not less than 100% of the replacement cost of
such improvements with agreed amount endorsement, and building ordinance
coverage to include demolition and increased cost of construction, which
building ordinance coverage endorsement shall be in an amount as Landlord shall
reasonably require, all subject only to such deductibles as Landlord shall
reasonably approve in writing. The full replacement cost of improvements shall
be designated annually by Landlord, in the good faith exercise of Landlord's
judgment. In the event that Tenant does not agree with Landlord's designation,
Tenant shall have the right to submit the matter an insurance appraiser
reasonably selected by Landlord and paid for by Tenant. The insurance appraiser
shall submit a written report of his appraisal and if said report discloses that
the improvements are not insured as therein required, Tenant shall promptly
obtain the insurance required. Landlord shall be named as the insured and all
proceeds of insurance shall be payable to Landlord. Said juice shall contain an
endorsement waiving the insurer's right of subrogation against any Landlord
Protected Party or any Tenant Protected Party, provided that such waiver of the
right of subrogation shall not be operative in any case where the effect thereof
is to invalidate such insurance coverage or increase the cost thereof (except
that either party shall have the right, within thirty (30) days following
written notice, to pay such increased cost, thereby keeping such waiver in full
force and effect).
(c) Landlord's business income, protecting Landlord from loss of
rents and other charges during the period while the Leased Premises are
untenantable due to fire or other casualty (for the period reasonably determined
by Landlord).
(d) Flood or earthquake insurance whenever, in the reasonable
judgment of Landlord, such protection is necessary and it is available at
commercially reasonable cost.
(e) All contents and Tenant's trade fixtures, machinery, equipment,
furniture and furnishings in the Leased Premises to the extent of at least
ninety percent (90%) of their replacement cost under Standard Fire and Extended
Coverage Policy and all other risks of direct physical loss as insured against
under Special Form ("all risk" coverage). Said insurance shall contain an
endorsement waiving the insurer's right of subrogation against any Landlord
Protected Party, provided that such waiver of the right of subrogation shall not
be operative in any case where the effect thereof is to invalidate such
insurance coverage or increase the cost thereof (except that either party shall
have the right, within thirty (30) days following written notice, to pay such
increased cost, thereby keeping such waiver in full force and effect).
(f) Tenant Protected Parties from all worker's compensation claims.
(g) Landlord and Tenant against breakage of all plate glass utilized
in the improvements on the Leased Premises.
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(h) Insurance against loss or damage from external explosion of
boilers, air conditioning equipment and miscellaneous electrical apparatus, if
any, in the Premises. Landlord shall be named as the insured and all proceeds of
insurance shall be payable to landlord. Said insurance shall contain the
endorsement waiving the insurer's right of subrogation against any Landlord
Protected Party or any Tenant Protected Party, provided that such waiver or
right of subrogation shall not be operative in any case where the effect thereof
is to invalidate such insurance coverage or increase the cost thereof (except
that either party shall have the right, within thirty (30) days following
written notice, to pay such increased costs, thereby keeping such waiver in full
force and effect).
6.3 Form of Insurance. All of the aforesaid insurance shall be in
responsible companies. The insurer and the form, substance and amount (where not
stated above) shall be satisfactory from time to time to Landlord and any
mortgagees of Landlord, and shall unconditionally provide that it is not subject
to cancellation or non-renewal except after at least thirty (30) days prior
written notice to Landlord and any mortgagee of Landlord. The insurance
specified in Section 6.2(b) shall contain a mortgage clause satisfactory to
Landlord' s mortgagee and the insurance specified in Sections 6.2(c), (d), (g)
and (h) shall also insure Landlord's mortgagee as required by Landlord's
mortgagees. Originals of Tenant' s insurance policies (or certificates thereof
satisfactory to Landlord), together with satisfactory evidence of payment of the
premiums thereon, shall be deposited with Landlord at the Commencement Date and
renewals thereof not less than thirty (30) days prior to the end of the term of
such coverage.
6.4 Fire Protection. Tenant shall conform with all applicable fire codes
of any governmental authority, and with the rules and regulations of Landlord's
fire underwriters and their fire protection engineers, including, without
limitations the installation of adequate fire extinguishers. In the event that
the Leased Premises are served by a sprinkler system, Tenant will, at all times
during the entire Lease term, cause the same to be served by a sprinkler
monitoring system connected to the local Fire department or to a qualified
monitoring service approved by Landlord; if, as of the Commencement Date, such a
sprinkler monitoring system is not installed and/or connected, Tenant shall, at
its sole cost and expense, install such a monitoring system and cause it to be
so connected.
VII. DAMAGE OR DESTRUCTION
7.1 Tenant's Obligation to Rebuild. In the event of damage to, or
destruction of, any improvements on the Leased Premises, or of the fixtures and
equipment therein, by fire or other casualty, Tenant shall promptly, it its
expense, repair, restore or rebuild the same to the condition existing prior to
the happening of such fire or other casualty; provided, however, that if the
damage or destruction is material and substantial, Landlord shall have the
right, subject to the consent of any first mortgagee whose consent thereto is
required, to terminate this Lease, effective on the date of such damage or
destruction, by giving written notice thereof to Tenant within sixty (60) days
after the event causing the damage or destruction. Rent shall not be reduced or
abated during the period of such repair, restoration or rebuilding even if the
improvement are not tenantable.
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7.2 Preconditions to Rebuilding. Before Tenant commences such repairing,
restoration or rebuilding involving an estimated cost of more than Fifty
Thousand Dollars ($50,000.00), plans and specifications therefor, prepared by a
licensed architect satisfactory to Landlord shall be submitted to Landlord for
approval and Tenant shall furnish to Landlord (a) an estimate of the cost of the
proposed work, certified to by said architect; (b) satisfactory evidence of
sufficient contractor's commercial general liability insurance covering
Landlord, builder's risk insurance, and worker's compensation insurance; and (c)
such security as Landlord may require to insure payment for the completion of
all work free and clear of liens.
7.3 Payment for Rebuilding. Provided that the insurer does not deny
liability as to the insureds, and provided Tenant is not then in default
hereunder, all sums arising by reason of loss under the insurance referred to in
Section 6.2(b), shall be deposited with the Depositary (as hereinafter defined)
to be available to Tenant for the work. Tenant shall deposit with the Depositary
any excess cost of the work over the amount held by the Depositary as proceeds
of the insurance within thirty (30) days after the date of the determination of
the cost of the work by the architect in accordance with Section 7.2(a) or, if
the insurer has denied liability as to the insureds, or if Tenant is then in
default hereunder, then Tenant shall promptly deposit the full amount of the
cost of the work with the Depositary. Tenant shall diligently pursue the repair
or rebuilding of the improvements in a good and workmanlike manner using only
high quality union workers and materials. The Depositary shall pay out
construction funds from time to time on the written direction of the architect
provided that the Depositary and Landlord shall first he permitted to inspect
the work and approve of the same, and shall be furnished with waivers of lien,
contractors, and subcontractors sworn statements and other evidence of cost and
payments so that the Depositary can verify that the amounts disbursed from time
to time are represented by completed and in-place work, and that said work is
free and clear of possible mechanics liens. No payment made prior to the final
completion of the work shall exceed ninety percent (90%) of the value of the
work completed and in place from time to time. At all times the undisbursed
balance remaining in the hands of Depositary shall be at least sufficient to pay
for the cost of completion of the work free and clear of liens. Any deficiency
shall be promptly paid into the Depositary by Tenant. Depositary, as used
herein, shall be any first mortgagee of the Leased Premises, or the Landlord if
there is no first mortgagee of the Leased Premises or if such first mortgagee
has refused to act as Depositary.
7.4 Excess Receipts by Depositary. Any excess of money received from
insurance remaining with the Depositary after the completed repair or rebuilding
of improvements, to Landlord's satisfaction, if there be no default by Tenant in
the performance of the Tenant's covenants and agreements hereunder, shall be
paid to Tenant.
7.5 Failure to Rebuild. If Tenant shall not enter upon the repair or
rebuilding of the improvements within a period of sixty (60) days after damage
or destruction by fire or otherwise, and prosecute the same thereafter with such
dispatch as may be necessary to complete the same within a reasonable period
after said damage or destruction occurs, (which repair period shall not to
exceed one hundred eighty (180) days after the date of commencement of such
repair or rebuilding), then Tenant shall be in default and in addition to
whatever other remedies Landlord may have under this Lease, at law in equity,
the money received by and then remaining in the hands of the Depositary
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shall be paid to and retained by Landlord as security for the continued
performance and observance by Tenant of the Tenant's covenants and agreements
hereunder, or Landlord (at Landlord's sole option) may terminate this Lease and
then be paid and retain the amount so held as liquidated damages resulting from
the failure on the part of Tenant to comply with the provisions of this Article.
VIII. CONDEMNATION
8.1 Taking of Whole. If the whole of the Leased Premises shall be taken or
condemned for a public or quasi public use or purpose by a competent authority,
or if such a portion of the Leased Premises shall be so taken that as a result
thereof the balance cannot be used for the same purpose and with substantially
the same utility to Tenant as immediately prior to such taking, or if the taking
is material and substantial and Landlord elects(subject to the consent of any
first mortgagee whose consent thereto is required) to terminate this Lease,
which election shall be made by giving written notice thereof to Tenant within
thirty(30) days, after delivery of possession to the condemning authority, then
in any of such events, the Lease shall terminate upon delivery of possession to
the condemning authority, and any award, compensation or damages (hereafter
sometimes called the "Award") shall be paid to and be the sole property of
Landlord whether the Award shall be made as compensation for diminution of the
value of the leasehold estate or the fee of the Leased Premises or otherwise and
Tenant hereby assigns to Landlord all of Tenant's right, title and interest in
and to any and all of the Award. Tenant shall continue to pay Rent until the
Lease is terminated and any Impositions and insurance premiums prepaid by Tenant
or any unpaid Impositions or other charges which accrue prior to the
termination, shall be adjusted between the parties.
8.2 Partial Taking. If only an insubstantial part of the Leased Premises
shall be so taken or condemned, but the Lease is not terminated pursuant to
Section 8.1 hereof, Tenant, at its sole cost and expense, shall repair and
restore the Leased Premises and all improvements thereon. There shall be no
abatement or reduction in any Rent because of such taking or condemnation.
Tenant shall promptly and diligently proceed to make a complete architectural
unit of the remainder of the improvements, complying with the procedure set
forth in Section 7.2. For such purpose, and provided Tenant is not then in
default hereunder, the amount of the Award relating to the improvements shall be
deposited with the Depositary (as defined in Section 7.3 hereof) which shall
disburse the Award to apply on the cost of said repairing or restoration in
accordance with the procedure set forth in Section 7.3. If Tenant does not make
a complete architectural unit of the remainder of the improvements within a
reasonable period after such taking or condemnation, (shall not exceed one
hundred eighty (180) days), then, in addition to whatever other remedies
Landlord may have under this Lease, at law in equity, the money received by and
then remaining in the custody of the Depositary shall, at Landlord's sole
election be paid to and retained by Landlord, as liquidated damages resulting
from failure of Tenant to comply with the provisions of this Section. Any
portion of the Award not intended for such repairing or restoration shall be
paid to Landlord.
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IX. MAINTENANCE AND ALTERATIONS
9.1 Maintenance Tenant shall keep and maintain the entire exterior and
interior of the Leased Premises, specifically including, without limitation, the
heating, ventilating and air conditioning equipment, the driveways, parking area
and the roof, exterior and interior walls, ceilings, floors and substructure in
good condition and repair. As used herein, each and every obligation of Tenant
to keep, maintain and repair shall include, without limitation, all ordinary and
extraordinary structural and nonstructural repairs and replacements. As to any
repair's costing in excess of $5,000.00, and as to any replacements whatsoever,
Tenant shall, in connection therewith, comply with the requirements of Section
9.2(b) hereof Tenant shall, to the extent possible, keep the Leased Premises
from falling temporarily out of repair or deteriorating. Tenant shall further
keep and maintain the improvements at any time situated upon the Leased
Premises, the parking area and all sidewalks and areas adjacent thereto, safe,
secure, clean and sanitary (including without limitation, snow and ice
clearance, planting and replacing flowers and landscaping, and necessary
interior painting and carpet cleaning at least once each year), and in full
compliance with all laws, statutes, rules, regulations, ordinances or orders of
any kind whatsoever having jurisdiction over the Leased Premises (including but
not limited to, zoning and building laws and ordinances, environmental
protection laws and regulations, the rules, regulations and orders of any
governmental agency and any building or environmental permit) and any condition,
easement, right-of-way, covenant or restriction of record, health, safety and
police regulations in force. Nothing in Section 1.4(a) shall be deemed to limit
Tenant's obligations under this Section 9.1(a). In the event the Leased Premises
are served or traversed by railroad switch or spur track, then Tenant,
notwithstanding the provision of any rail track agreements to the contrary,
shall repair and maintain, and remove snow from, or reimburse the railroad
carrier for repairing, maintaining and/or snow removal, as the case may be, the
portion of the track and related facilities on or serving the Leased Premises.
9.2 Alterations.
(a) Tenant shall make all alterations, additions and improvements
(hereinafter "Alterations") on the Leased Premises, and on. and to the
improvements, parking areas, sidewalks, and equipment thereon, required by any
governmental authority or which may be made necessary by the act or neglect of
Tenant, its employees, agents or contractors, invites or any persons, firm or
corporation, claiming by, through or under Tenant. Except as provided in the
immediately preceding sentence, Tenant shall not create any openings in the roof
or exterior walls, or make any other Alterations to the Leased Premises without
Landlord's prior written consent, which consent Landlord may, in its discretion,
withhold.
(b) As to any Alterations which Tenant is required hereunder to
perform or to which Landlord consents, and as to any repairs costing in excess
of $5,000.00, and as to any replacements whatsoever, or as to any work performed
pursuant to Article XVIII hereof, such work shall be performed with now
materials, in all good and workmanlike manner, strictly in accordance with plans
and specifications therefor and approved in writing by Landlord and in
accordance with all applicable laws and ordinances. Tenant shall, prior to the
commencement of such work, deliver
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to Landlord copies of all required permits. At Landlord's option (exercised by
notice in writing from Landlord to Tenant given within ten (10) days after
Landlord receives Tenant's plans and specifications), such work shall be
performed by employees of or contractors employed by Landlord, at Tenant's
expense. Tenant shall permit Landlord to monitor construction operations in
connection with such work, and to restrict, as may reasonably be required, the
passage of manpower and materials, and the conducting of construction activity
in order to avoid unreasonable disruption to Landlord or to other parties or
other damage to the Leased Premises. Tenant shall pay to Landlord, for
Landlord's overhead in connection with performing or monitoring such work, a sum
equal to ten percent (10%) of Tenant's costs for such work. Upon completion of
any such work or on behalf o Tenant, Tenant shall provide Landlord with such
documents as Landlord may require (including, without limitation, sworn
contractors' statements and supporting lien waivers) evidencing payment in full
for such work, and "as built" working drawings. In the event Tenant performs any
work not in compliance with the provisions of this Section 9.2(b), Tenant shall,
upon written notice from Landlord, immediately remove such work and restore the
Leased Premises to their condition immediately prior to the performance thereof.
If Tenant fails so to remove such work and restore the Leased Premises as
aforesaid, Landlord may, at its option, and in addition to all other rights or
remedies of Landlord under his Lease, at law or in equity, enter the Leased
Premises and perform said obligation of Tenant and Tenant shall reimburse
Landlord for the cost to the Landlord thereof, immediately upon being billed
therefor by Landlord. Such entry by Landlord shall not be deemed an eviction or
disturbance of Tenant's use or possession of the Leased Premises nor render
Landlord liable in any manner to Tenant.
X. ASSIGNMENT AND SUBLETTING
10.1 Consent Required.
(a) Tenant shall not, without Landlord's prior written consent, (i)
assign, convey or mortgage this Lease or any interest under it; (ii) sublet the
Leased Premises or any part thereof; (iii) amend a sublease previously consented
to by Landlord; or (iv) permit the use or occupancy of the Leased Premises or
any part thereof by anyone other than Tenant. If Tenant proposes to assign the
Lease or enter into any sublease of the Leased Premises, Tenant shall deliver
written notice thereof to Landlord, together with a copy of the proposed
assignment or sublease agreement at least thirty (30) days prior to the
effective date of the proposed assignment, or the commencement date of the term
of the proposed sublease. Any proposed assignment or sublease shall be expressly
subject to all of the terms, conditions and covenants of this Lease. Any
proposed assignment shall contain an express written assumption by assignee of
all of Tenant's obligations under this Lease. Any proposed sublease shall (i)
provide that the sublessee shall procure and maintain policies of insurance as
required of Tenant under the terms of Section 6.2 hereof, (ii) provide for a
copy to Landlord of notice of default by either party, and (iii) otherwise be
reasonably acceptable in form to Landlord.
(b) Landlord's consent to any assignment or subletting shall not
unreasonably be withheld. In making its determination as to whether to consent
to any proposed assignment or sublease, Landlord may consider, among other
things, the creditworthiness and business reputation
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of the proposed assignee or subtenant, the intended manner of use of the Leased
Premises by the proposed assignee or subtenant, estimated vehicular traffic on
or about the Leased Premises which would be generated by the proposed assignee
or subtenant or by its manner of use of the Leased Premises, and any other
factors which Landlord may reasonable deem relevant. Tenant's remedy, in the
event that Landlord shall unreasonably withhold to, an assignment or subletting,
shall be limited to injunctive relief or declaratory judgment and in no event
shall Landlord be liable for damages resulting therefrom. No consent by Landlord
to any assignment or subletting shall be deemed to any assignment or subletting
shall be deemed to be a consent to any further assignment, subletting, or sub-
subletting.
(c) In the event that Tenant proposes to assign the Lease or to enter
into a sublease of all or substantially all of the Leased Premises, Landlord
shall have the right, (so long as any first mortgage of Landlord shall consent
in writing) in lieu of consenting thereto, to terminate this Lease, effective as
of the effective date of the proposed assignment or the commencement date of the
proposed sublease, as the case may be. Landlord may exercise sold right by
giving Tenant written notice thereof within twenty (20) days after receipt by
Landlord of Tenant's notice, given in compliance with Section 10.l(a) hereof, of
the proposed assignment or sublease. In the event that Landlord exercises such
right, Tenant shall surrender the Leased Premises on the effective date of the
proposed assignment or sublease and this Lease shall thereupon terminate.
Landlord may, in the event of such termination, enter into a lease with any
proposed assignee or subtenant for the Leased Premises.
(d) In the event that Tenant subleases only a portion of the Leased
Premises, Tenant shall pay to Landlord, monthly, as additional rent hereunder,
fifty percent (50%) of the amount calculated by subtracting from the Rent and
other charges and consideration payable from time to time by the subtenant to
Tenant for said space, the amount of Rent payable by Tenant to Landlord under
this Lease, allocated (based on the relative rentable square foot area of the
total Leased Premises so subleased by Tenant) to the subleased portion of the
Leased Premises.
(e) No permitted assignment shall be effective and no permitted
sublease shall commence unless and until any default by Tenant hereunder shall
have been cured. No permitted assignment or subletting shall relieve Tenant from
Tenant's obligations and agreements hereunder and Tenant shall continue to be
liable as a principal and not as a guarantor or Surety to the same extent as
though no assignment or subletting had been made.
10.2 Merger or Consolidation. Tenant may, without Landlord's
consent, assign this Lease to any corporation resulting from a merger or
consolidation of the Tenant upon the following conditions: (a) that the total
assets and net worth of such assignee after such consolidation or merger shall
be equal to or more than that of Tenant immediately prior to such consolidation
or merger; (b) that Tenant is not at such time in default hereunder; and (c)
that such successor shall execute an instrument in writing fully assuming all of
the obligations and liabilities imposed upon Tenant hereunder and deliver the
same to Landlord prior to the effective date of such assignment.
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10.3 Voting Control of Tenant. If Tenant is a corporation, the shares of
which, at the time of execution of this Lease or during the term hereof are or
shall be held by fewer than one hundred (100) persons, and if at any time during
the term of this Lease the persons, firms or corporations who own a majority or
controlling number of its shares at the time of the execution of this Lease or
following Landlord's consent to a transfer of such shares cease to own such
shares (except as a result of transfer by bequest or inheritance) and such
cessation shall not first have been approved in writing by Landlord, then such
cessation shall, at the option of Landlord, be deemed a default by Tenant under
this Lease.
10.4 Other Transfer of Lease. Tenant shall not allow or permit any
transfer of this Lease, or any interest hereunder, by operation of law, or
mortgage, pledge, encumber or permit a lien on this Lease or any interest
herein.
XI. LIENS AND ENCUMBRANCES
11.1 Encumbering Title. Tenant shall not do any act which shall in any way
encumber the title of Landlord in and to the Leased Premises, nor shall the
interest or estate of Landlord in the Leased Premises in any way be subject to
any claim by way of lien or encumbrance, whether by operation of law or virtue
of any express or implied contract by Tenant. Any claim to, or lien upon, the
Leased Premises arising from any act or omission of Tenant shall accrue only
against the leasehold estate of Tenant and shall be subject and subordinate to
the paramount title and rights of Landlord in and to the Leased Premises.
11.2 Liens and Right to Contest. Tenant shall not permit the Leased
Premises to become subject to any mechanics', laborers' or materialmen's lien on
account of labor or material furnished to Tenant or claimed to have been
furnished to Tenant in connection with work of any character performed or
claimed to have been performed on the Leased Premises by, or at the direction or
sufferance of Tenant; provided, however, that Tenant shall have the right to
contest, in good faith and with reasonable diligence, the validity of any such
lien or claimed lien if Tenant shall give to Landlord such security as may be
deemed satisfactory to Landlord to assure payment thereof and to prevent any
sale, foreclosure, or forfeiture of the Leased Premises by reason of nonpayment
thereof; provided further, that on final determination of the lien or claim for
lien, Tenant shall immediately pay any judgment rendered, with all proper costs
and charges, and shall have the lien released and any judgment satisfied.
XII. UTILITIES
12.1 Utilities. Tenant shall purchase a utility services, including but
not limited to fuel, water, sewerage and electricity, from the utility or
municipality providing such service, and shall pay for such services when such
payments are due.
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XIII. INDEMNITY
13.1 Indemnity. Tenant will protect, indemnify and save harmless
Landlord Protected Parties (as defined in Section 6.1) (for the purpose of this
Article XIII only, the term "Landlord Protected Parties" shall also include each
mortgagee of Landlord and the agents of such mortgagee and any purchaser of the
Real Estate), from and against all liabilities, obligations, claims, damages,
penalties, causes of action, costs and expenses (including without limitation,
reasonable attorneys' fees and expenses) imposed upon or incurred by or asserted
against the Landlord Protected Parties or any of them and Landlord's mortgagee,
if any, of which Tenant is given written notice by reason of (i) any failure on
the part of Tenant to perform or comply with any of the terms of this Lease; or
(ii) performance of any labor or services or the furnishing of any materials or
other property in respect of the Leased Premises or any part thereof. In case
any action, suit or proceeding is brought against the Landlord Protected Parties
or any of them and Landlord's mortgagee, if any, of which Tenant is given
written notice by reason of any occurrence described in this Section 13.1,
Tenant will, at Tenant's expenses by counsel approved by Landlord, resist and
defend such action, suit or proceeding, or cause the same to be resisted and
defended. The obligations of Tenant under this Section 13.1 shall survive the
expiration or earlier termination of this Lease.
XIV. RIGHTS RESERVED TO LANDLORD
14.1 Rights Reserved to Landlord. Without limiting any other rights
reserved or available to Landlord under this Lease, at law or in equity,
Landlord, reserves the following rights to be exercised at Landlord's election:
(a) To change the street address of the Leased Premises;
(b) To inspect the Leased Premises and to make repairs, additions or
alterations to the Leased Premises;
(c) To show the Leased Premises to prospective purchasers,
mortgagees, or other persons having a legitimate interest in viewing the same,
and, at any time within one (1) year prior to the expiration of the Lease term
to persons wishing to rent the Leased Premises;
(d) During the last year of die, Lease term, to place and maintain
the usual "For Rent" sign in or on the Leased Premises;
(e) If Tenant shall theretofore have vacated the Leased Premises
(but not earlier than during the ninety (90) days of the Lease term), to
decorate, remodel, repair, alter or otherwise prepare the Leased Premises for
new occupancy; and
(f) To place and maintain "For Sale" signs on the Leased Premises
and on the exterior of the building on the Leased Premises.
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Landlord may enter upon the Leased Premises for any and all of said purposes and
may exercise any and all of the foregoing rights hereby reserved, during normal
business hours unless an emergency exists, without being deemed guilty of any
eviction or disturbance of Tenant's use or possession of the Leased Premises,
and without being liable in any manner to Tenant.
XV. QUIET ENJOYMENT
15.1 Quiet Enjoyment. So long as no Event of Default of Tenant has
occurred, Tenant's quiet and peaceable enjoyment of the Leased Premises shall
not be disturbed or interfered with by Landlord or by any person claiming by,
through or under Landlord.
XVI. SUBORDINATION OR SUPERIORITY
16.1 Subordination or Superiority. If the mortgagee or trustee named in
any first mortgage or first trust deed hereafter made shall agree that, if it
becomes the owner of the Leased Premises by foreclosure or deed in lieu of
foreclosure, it will recognize the rights and interest of Tenant under the Lease
and not disturb Tenant's use and occupancy of the Leased Premises if and so long
as no Event of Default of Tenant has occurred (which agreement may, at such
mortgagee's option, require attainment by Tenant), then all or a portion of the
rights and interests of Tenant under this Lease shall be subject and subordinate
to such first mortgage or first trust deed and to any and all advances to be
made thereunder, and to the interest thereon, and all renewals, replacements and
extensions thereof. Any such mortgagee or trustee may elect that, instead of
making this Lease subject and subordinate to its first mortgage or first trust
deed, the rights and interest of Tenant under this Lease shall have priority
over the lien of its mortgage or trust deed. Tenant agrees that it will, within
ten (10) days after demand in writing, execute and deliver whatever instruments
may be required, either to make this Lease subject and subordinate to such a
mortgage or trust deed, or to give the Lease priority over the lien of the
mortgage or trust deed, whichever alternative may be elected by the mortgagee or
trustee. If Tenant fails to execute and deliver any such instrument, Tenant does
hereby make, constitute and irrevocably appoint Landlord as its attorney in
fact, in its name, place and stead so to do.
XVII. SURRENDER
17.1 Surrender. Upon the termination of this Lease, whether by
forfeiture, lapse of time or otherwise, or upon termination of Tenant's right to
possession of the Leased Premises, Tenant will at once surrender and deliver up
the Leased Premises, together with all Improvements thereon, to Landlord, broom
swept, in good condition and repair, reasonable wear and tear excepted;
conditions existing because of Tenant's failure to perform maintenance, repairs
or replacements as required herein, or because of Tenant's particular use of the
Leased Premises (even if permitted pursuant to Section 1.4(a) hereof), shall not
be deemed "reasonable wear and tear". Tenant shall deliver to Agent all keys to
all doors therein. As used herein, the term "Improvements" shall include,
without limitation, all plumbing, lighting, electrical, heating, cooling and
ventilating fixtures and equipment, and all Alterations (as said term is defined
in Section 9.2 hereof) whether or not permitted under Section 9.2. All
Alterations, temporary or permanent, made in or upon the Leased Premises by
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Tenant shall become Landlord's property and shall remain upon the Leased
Premises on any such termination without compensation, allowance or credit to
Tenant; provided, however, that Landlord shall have the right to require Tenant
to remove any Alterations and restore the Leased Premises to their condition
prior to the making of such Alterations, repairing any damage occasioned by such
removal and restoration. Said right shall be exercised by Landlord giving
written notice thereof to Tenant on or before ninety (90) days after such
termination. If Landlord requires removal of any Alterations and Tenant does not
make such removal in accordance with this Section at the time of such
termination, or within ten (10) days after such request, whichever is later,
Landlord may remove the same (and repair any damage occasioned thereby), and
dispose thereof or, at its election, deliver the same to any other place of
business of Tenant or warehouse the same. Tenant shall pay to Landlord the costs
of such removal, repair, delivery and warehousing on demand.
17.2 Removal of Tenant's Property. Upon the termination of this Lease by
lapse of time, Tenant shall remove Tenant's articles of personal property
incident to Tenant's business ("Trade Fixtures"); provided, however, that Tenant
shall repair any injury or damage to the Leased Premises which may result from
such removal, and shall restore the Leased Premises to the same condition as
prior to the installation thereof. If Tenant does not remove Tenant's Trade
Fixtures from the Leased Premises prior to the expiration or earlier termination
of the Lease term, Landlord may, at its option, remove the same (and repair any
damage occasioned thereby) and dispose thereof or deliver the same to any other
place of business of Tenant or warehouse the same, and Tenant shall pay to
Landlord the cost of such removal, repair, delivery and warehousing on demand.
or Landlord may treat such Trade Fixtures as having been conveyed to Landlord
with this Lease as a Bill of Sale, without further payment or credit by Landlord
to Tenant.
17.3 Holding Over. Tenant shall have no right to occupy the Leased
premises or any portion thereof after the expiration of the Lease or after
termination of the Lease or of Tenant's right to Possession pursuant to Section
19.1 hereof. In the event Tenant or any party claiming by, through or under
Tenant holds over (including any assignee or sublessee), Landlord may exercise
any and all remedies available to it at law or in equity to recover possession
of the Leased Premises, and for damages. For each and every month or partial
month that Tenant or any party claiming by, through or under Tenant remains in
occupancy of all or any portion of the Leased Premises after the expiration of
the Lease or after termination of the Lease or Tenant's right to possession,
Tenant shall pay, as minimum damages and not as a penalty, monthly rental at a
rate equal to double the rate of Rent payable by Tenant hereunder immediately
prior to the expiration or other termination of the Lease or of Tenant's right
to possession. The acceptance by Landlord of any lesser sum shall be consumed as
a payment on account and not in satisfaction of damages for such holding over.
If the holding over occurs at the expiration of the Lease term or by reason of a
termination by mutual agreement of the parties, Landlord may, as an alternative
remedy, elect that such holding over shall constitute a renewal of this term for
one (1) year at a rental equal to 150% of the rate of Annual Base Rent payable
hereunder immediately prior to the expiration of the Lease, and upon all of the
other covenants and agreements contained in this Lease.
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XVIII. ENVIRONMENTAL CONDITIONS
18.1 "Environmental Condition" Defined. As used in this Lease, the
phrase "Environmental Condition" shall mean: (a) any advance condition relating
to surface water, ground water, drinking water supply, land, surface or
subsurface strata or the ambient air, and includes, without limitation, air,
land and water pollutants, noise, vibration, light and odors, or (b) any
condition which may result in a claim of Liability under the Comprehensive
Environment Response Compensation and Liability Act, as amended ("CERCLA"), or
the Resource Conservation and Recovery Act ("RCRA"), or any claim of violation
of the Clean Air Act, the Clear Water Act, the Toxic Substance Control Act
("TSCA"), or any claim of liability or of violation under any federal statute
hereafter enacted dealing with the protection of the environment or with the
health and safety of employees or members of the general public, or under any
rule, litigation, permit or plan under any of the foregoing, or under any law,
rule or regulation now or hereafter promulgated by the state in which the Leased
Premises are located, or any political subdivision thereof, relating to such
matters (collectively "Environmental Laws").
18.2 Compliance by Tenant. Tenant shall, at all times during the Lease
term, comply with all Environmental Laws applicable to the Leased Premises and
shall not, in the use and occupancy of the Leased Premises, cause or contribute
to, or permit or suffer any other party to cause or contribute to any
Environmental Condition on or about the Leased Premises. Without limiting the
generality of the foregoing, Tenant shall not, without the prior written consent
of Landlord, receive, keep, maintain or use on or about the Leased Premises any
substance as to which a filing with a local emergency planning committee, the
State Emergency Response Commission or the fire department having jurisdiction
over the Leased Premises is required pursuant to (S) 311 and/or (S) 312 of
CERCLA, as amended by the Superfund Amendment and Reauthorization Act of 1986
("SARA") (which latter Act includes the Emergency Planning and Community Right-
To-Know Act of 1986); in the event Tenant makes a filing pursuant to SARA, or
maintains substances as to which a filing would be required, Tenant shall
simultaneously deliver copies thereof to Agent or notify Agent in writing of the
presence of those substances.
18.3 Environmental Indemnity. Tenant will protect, indemnify and save
harmless the Landlord Protected Parties (as defined in Section 6.1), and all of
their respective agents, directors, officers and employees, and Landlord's
mortgagee, if any, of which Tenant is given written notice, from and against all
liabilities, obligations, claims, damages, penalties, causes of action, costs
and expenses (including, without limitation reasonable attorneys' fees and
expenses) of whatever kind or nature, contingent or otherwise, known or unknown,
incurred or imposed, based upon any Environmental Laws or resulting from any
Environmental Condition on or about the Leased Premises which occurs or is
contributed to during the Lease term. In case any action, suit or proceeding is
brought against any of the parties indemnified herein by man of any occurrence
described in this Section 18.3, Tenant will, at Tenant's expense, by counsel
approved by Landlord, resist and defend such action, suit or proceeding, or
cause the same to be resisted and defended. The obligations of Tenant under this
Section 18.3 shall survive the expiration or earlier termination of this Lease.
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18.4 Testing and Remedial Work. Landlord may conduct tests on or about
the Leased Premises for the purpose of determining the presence of any
Environmental Condition. If such tests indicate the presence of an Environmental
Condition on or about the Leased Premises which occurs or is contributed to
during the lease term, Tenant shall, in addition to its other obligations
hereunder, reimburse Landlord for the cost of conducting such tests. Without
limiting Tenant's liability under Section 18.3 hereof, in the event of any such
Environmental Condition, Tenant shall promptly and at its sole cost and expense,
take any and all steps necessary to remedy the same, complying with all
provisions of applicable laws and with Section 9.2(b) hereof, or shall, at
Landlord's election, reimburse Landlord for the cost to Landlord of remedying
the same. The reimbursement shall be paid by Tenant to Landlord in advance of
Landlord's performing such work based upon Landlord's reasonable estimate of the
cost thereof, and upon completion of such work by Landlord, Tenant shall pay to
Landlord any shortfall promptly after Landlord bills Tenant therefor, or
Landlord shall promptly refund to Tenant any excess deposit, as the case my be.
XIX. REMEDIES
19.1 Defaults. Tenant agrees that any one or more of the following events
shall be considered Events of Default as said term is used herein:
(a) Tenant shall be adjudged an involuntary bankrupt, or a decree or
order approving, as properly filed, a petition or answer filed against Tenant
asking reorganization of Tenant under the Federal bankruptcy laws as now or
hereafter amended, or under the laws of any state, shall be entered, and any
such decree or judgment or order shall not have been vacated or set aside within
sixty (60) days from the date of the entry or granting thereof; or
(b) Tenant shall file or admit the jurisdiction of the court and the
material allegations contained in any petition in bankruptcy or any petition
pursuant or purporting to be pursuant to the Federal bankruptcy laws as now or
hereafter amended or Tenant shall institute any proceeding or shall give its
consent to the institution of any proceedings for any relief of Tenant under any
bankruptcy or insolvency laws or any laws relating to the relief of debtors,
readjustment of indebtedness, reorganization, arrangements, composition or
extension; or
(c) Tenant shall make any assignment for the benefit of creditors or
shall apply for or consent to the appointment of a receiver for Tenant or any of
the property of Tenant; or
(d) The Leased Premises are levied upon by any revenue officer or
similar officer; or
(e) A decree or order appointing a receiver of the property of
Tenant shall be made and such decree or order shall not have been vacated or set
aside within sixty (60) days from the date of entry or granting thereof, or
(f) Tenant shall abandon the Leased Premises or vacate the same
during the term hereof, or
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(g) Tenant shall default in any payment of Rent or in any other
payment required to be made by Tenant hereunder when due as herein provided (all
of which other payments shall be deemed "additional rent" payable hereunder), or
shall default, under Section 6.2 or Section 21.2 hereof, and any such default
shall continue for five (5) days after notice thereof in writing to Tenant; or
(h) Tenant shall fail to contest the validity of any lien or claimed
lien and give security to Landlord to assess payment thereof, or, having
commenced to contest the same and having given such security, shall fail to
prosecute such contest with diligence, or shall fail to have the same released
and satisfy any judgment rendered thereon, and such default continues for ten
(10) days after notice thereof in writing to Tenant; or
(i) Tenant shall default in keeping, observing or performing any of
the other covenant or agreements herein contained to be kept, observed and
performed by Tenant, and such default shall continue for thirty (30) days after
notice thereof in writing to Tenant or shall exist at the expiration of the
Lease term; or
(j) Tenant shall default in keeping, observing or performing any
covenant or agreement herein contained to be kept, observed and performed by
Tenant, which default may result in the imminent risk of damage to property
(including without limitation the Leased Premises or the improvements thereon)
or injury to or death of persons, and such default shall not be cured
immediately upon notice to Tenant(which notice may be oral); or
(k) Tenant shall default (with time to cure expired) under any other
lease made by Tenant for any other premises owned by Landlord or managed by
Agent or by any successor to Agent as its agent for Landlord or the beneficiary
of Landlord; or
(l) Tenant shall repeatedly be law in the payment of Rent or other
charges required to be paid hereunder or shall repeatedly default in the
keeping, observing, or performing of any other covenants or agreements herein
contained to be kept, observed or performed by Tenant (provided notice of such
payment or other defaults shall have, been given to Tenant, but whether or not
Tenant shall have timely cured any such payment or other defaults of which
notice was given).
19.2 Remedies. Upon the occurrence of any one or more Events of Default,
Landlord may at its election terminate this Lease or terminate Tenant's right to
possession only, without terminating the Lease. Upon termination of the Lease,
or upon any termination of Tenant's right to possession without termination of
the Lease, Tenant shall surrender possession and vacate the Leased Premises
immediately, and deliver possession thereof to Landlord, and Tenant hereby
grants to Landlord the full and free right, without demand or notice of any kind
to Tenant (except as hereinabove expressly provided for), to enter into and upon
the Leased Premises in such event with or without process of law and to
repossess the Leased Premises as Landlord's former estate and to expel or remove
Tenant and any others who may be occupying or within the Leased Premises without
being deemed in any manner guilty of trespass, eviction, or forcible entry or
detainer, without incurring any liability for any damage resulting therefrom and
without relinquishing Landlord's rights to Rent or any other right
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given to Landlord hereunder or by operation of law. Upon termination of the
Lease, Landlord shall be entitled to recover as damages all Rent and other sums
due and payable by Tenant on the date of termination, plus (a) an amount equal
to the value, on an annual basis, of the excess (discounted to present value at
six percent (6 %) annually) of (i) the Rent and other sums provided herein to be
paid by Tenant for the residue of the stated term hereof over (ii) the fair
rental value of the Leased Premises for the residue of the stated term taking
into account the time and expenses necessary to obtain a replacement tenant or
tenants, including expenses hereinafter described relating to recovery of the
Leased Premises, preparation for releasing and for reletting itself), and (b)
the cost of performing any other covenants to be performed by Tenant. If
Landlord elects to terminate Tenant's right to possession only without
terminating the Lease, Landlord may, at Landlord's option, enter on to the
Leased Premises, remove Tenant's signs and other evidences of tenancy, and take
and hold possession thereof as hereinafter provided, without such entry and
possession terminating the Lease or releasing Tenant, in whole or in part, from
Tenant's obligations to pay the Rent and other than provided herein to be paid
by Tenant for the full term or from any other of its obligations under this
Lease. Landlord may relet all or any part of the Leased Premises for such Rent
and upon such terms as shall be satisfactory to Landlord (including the right to
relet the Leased Premises as a part of a larger area the right to change the
character or use made of the Leased Promises). For the purpose of such releting,
Landlord may decorate or make any repairs, changes, alterations or additions in
or to the Leased Premises that may be necessary or convenient. If Landlord does
not relet the Leased Premises, Tenant shall pay to Landlord on demand damages
equal to the amount of the Rent, and other sums provided herein to be paid by
Tenant for the remainder of the Lease term. If the Leased Premises are relet and
a sufficient sum shall not be realized from such releting after paying off of
the expenses of such decorations, repairs, changes, alterations, additions, the
expenses of such releting and the collection of the rent accruing therefrom
(including, but not by way of limitation. attorneys' fees and brokers'
commissions), to satisfy the Rent and other sums herein provided to be paid for
the remainder of the Lease term, Tenant shall pay to Landlord on demand any
deficiency and Tenant agrees that Landlord may file suit to recover any Rent or
other sums falling due under the terms of this section from time to time.
Landlord shall use reasonable efforts to mitigate its damages arising out of
Tenant's default; Landlord shall not be deemed to have failed to use such
reasonable efforts by reason of the fact that Landlord has leased or sought to
lease other vacant premises owned by Landlord (or Landlord's beneficiary, if
Landlord is an Illinois land trust), in preference to reletting the Leased
Premises, or by reason of the fact that Landlord has sought to relet the Leased
Premises at a rental rate higher than that payable by Tenant under the Lease
(but not in excess of the then current market rental rate).
19.3 Tenant's Opportunity to Cure. If Tenant defaults under Section
l9.1(i), and such default cannot with due diligence be cured within a period of
thirty (30) days, and if notice thereof in writing shall have been given to
Tenant, and if Tenant, prior to the expiration of thirty (30) days from and
after the giving of such notice, commences to eliminate the cause of such
default and proceeds diligently and with reasonable dispatch to take all steps
and do all work required to cure such default and does so cure such default,
then an Event of Default shall not be deemed to have occurred; provided,
however, that Tenant's right to core hereunder shall not extend beyond the
expiration of the Lease term, and provided further that the curing of any
default in such manner shall
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not be construed to limit or restrict Landlord's remedies for any other default
which becomes an Event of Default.
19.4 Landlord's Right to Cure. Landlord may, but shall not be obligated
to, cure any default by Tenant (specifically including, but not by way of
limitation, Tenant's failure to obtain insurance, make repairs, or satisfy lien
claims) and whenever Landlord so elects, all costs and expenses paid by Landlord
in curing such default, including without limitation reasonable attorneys' fees,
shall be so much additional rent due on the next rent date after such payment
together with interest (except in the case of said attorney's fees) at the
highest rate then payable by Tenant in the state in which the Leased Premises
are located or, in the absence of such a maximum rate, at a rate per annum equal
to two per cent (2%) in excess of the announced base rate or equivalent rate of
interest of American National Bank and Trust Company of Chicago (as publicly
announced by said bank) in effect on the date of such advance, from the date of
the advance to the date of repayment by Tenant to Landlord.
19.5 Remedies Cumulative. No remedy herein or otherwise conferred upon or
reserved to Landlord shall be considered to exclude or suspend any other remedy
but the same shall be cumulative and shall be in addition to every other remedy
given hereunder, or now or hereafter existing at law or in equity or by statute,
and every power and remedy given by this Lease to Landlord may be exercised from
time to time and so often as occasion may arise or as may be deemed expedient.
19.6 No Waiver. No delay or omission of Landlord to exercise any right or
power arising from any default shall impair any such right or power or be
construed to be a waiver of any such default or any acquiescence therein. No
waiver of any breach of any of the covenants of this Lease shall be construed,
taken or held to be a waiver of any other breach, or as a waiver, acquiescence
in or consent to any further or succeeding breach of the same covenant. The
acceptance by Landlord of any payment of Rent after the termination by Landlord
of this Lease or of Tenant's right to possession hereunder shall not, in the
absence of agreement in writing to the contrary by Landlord, be deemed to
restore this Lease or Tenant's right to possession hereunder, as the case may
be, but shall be construed as a payment on account, and not in satisfaction of
damages due from Tenant to Landlord.
XX. SECURITY DEPOSIT
20.1 Security Deposit. To secure the faithful performance by Tenant of all
the terms, covenants and conditions in this Lease set forth and contained on the
part of the Tenant to be fulfilled, kept, observed and performed, including, but
without limiting the generality of the foregoing, such terms, covenants and
conditions which become applicable upon the expiration or termination of the
same or upon termination of Tenant's right to possession pursuant to Section
19.2 of the Lease, Tenant has deposited herewith the Security Deposit with Agent
on the understanding (a) that the Security Deposit or any portion thereof not
previously applied, or from time to time such other portions thereof, may be
applied to the curing of any default that may then exist, without prejudice to
any other remedy or remedies which Landlord may have on account thereof, and
upon
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such application Tenant shall pay Agent on demand the amount so applied which
shall be added to the Security Deposit so the same may be restored to its
original amount, (b) that should the Leased Premises be conveyed by Landlord or
should Agent cease to be the agent of the beneficiary or beneficiaries of
Landlord, the Security Deposit or any portion thereof not previously applied may
be turned over to Landlord's grantee or the new agent, as the case may be, and
if the same be turned over as aforesaid, Tenant hereby releases Landlord and
Agent from any and all liability with respect to the Security Deposit and/or its
application or return, and Tenant agrees to look to such grantee or new agent,
as the case may be, for such application or return; (c) that Landlord shall have
no personal liability with respect to said sum and Tenant shall look exclusively
to Agent or its successors pursuant to subsection (b) hereof for return of said
sum when Tenant is entitled hereunder to such return; (d) that Agent or its
successor shall not be obligated to hold the Security Deposit as a separate
fund, but on the contrary may commingle the same with its other funds; (e) that
if Tenant shall faithfully fulfill, keep, perform and observe all of the
covenants, conditions, and agreements in this Lease set forth and contained on
the part of Tenant to be fulfilled, kept, performed and observed, the Security
Deposit or the part or portion thereof not previously applied shall be returned
to the Tenant without interest no later than thirty (30) days after the
expiration of the term of this lease or any renewal or extension thereof,
provided Tenant has vacated the Leased Premises and surrendered possession
thereof to Landlord at the expiration of said term or any extension or renewal
thereof as provided herein; (f) in the event that Landlord terminates the Lease
or Tenant's right to possession pursuant to Section 19.2 of this Lease, Agent
may apply the Security Deposit against all damages suffered to the date of such
termination and/or may return the Security Deposit to apply against such damages
as may be suffered or shall accrue thereafter by reason of Tenant's default; and
(g) in the event any bankruptcy insolvency, reorganization or other creditor
debtor proceedings shall be instituted by or against Tenant, or its successors
or assigns, the Security Deposit shall be deemed to be applied first to the
payment of any Rent and/or other sums due Landlord for all periods prior to the
institution of such proceedings, and the balance, if any, of the Security
Deposit may be retained or paid to Landlord in partial liquidation of Landlord's
damages.
XXI. MISCELLANEOUS
21.1 Non Merger. Notwithstanding the acquisition of the Leased Premises
and/or Real Estate or the beneficial interest or ownership thereof by the Lessee
or the fact that the interests of Lessor and Lessee hereunder shall be held by
the same person or persons, there shall not be a merger of leasehold estate into
the fee and this Lease shall remain valid and in full force and effect in
accordance with its terms.
21.2 Tenant's Statement. Tenant shall furnish to Landlord, within ten (10)
days after written request therefor from Landlord, a copy of the then most
recent audited and certified statement of Tenant. It is mutually agreed that
Landlord may deliver a copy of such statements to any mortgagee or prospective
mortgagee of Landlord, or any prospective purchaser of the Leased Premises, but
otherwise Landlord shall treat such 6mtements and information contained therein
as confidential.
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21.3 Estoppel Certificates. Tenant shall at any time and from time to time
upon not less than ten (10) days prior written request from Landlord, execute,
acknowledge and deliver to Landlord, in form reasonably satisfactory to Landlord
and/or Landlord's mortgagee, a written statement certifying (if true) that
Tenant has accepted the Leased Premises, that this lease is unmodified and in
full force and effect (or, if there have been modifications, that the same is in
full force and effect as modified and stating the modifications), that Landlord
is not in default hereunder, the date to which Rent has been paid in advance, if
any, and such other accurate certifications as may reasonably be required by
Landlord or Landlord's mortgagee, agreeing to give copies to any mortgagee of
Landlord of all notices by Tenant to Landlord and agreeing to afford Landlord's
mortgagee a reasonable opportunity to cure any default of Landlord. It is
intended that any such statement delivered pursuant to this Section may be
relied upon by any prospective purchaser or mortgagee of the Leased Premises and
their respective successors and assigns.
21.4 Amendments Must Be In Writing. None of the covenants, terms or
conditions of this Lease, to be kept and performed by either party, shall in any
manner be altered, waived, modified, changed or abandoned except by a written
instrument, duly signed and delivered by the other party.
21.5 Notices. All notices to or demands upon Landlord or Tenant desired or
required to be given under any of the provisions hereof shall be in writing. Any
notices or demands from Landlord to Tenant shall be deemed to have been duly and
sufficiently given when received or refused if sent by United States registered
or certified mail in an envelope property stamped and addressed or if sent by
courier service, with receipt, to Tenant at Tenant's Address or at such other
address as Tenant may theretofore have designated by written notice to landlord,
and any notices or demands from Tenant to landlord shall be deemed to have been
duly and sufficiently given if mailed by United States registered or certified
mail in an envelope properly stamped and addressed or sent by courier service,
with receipt, to Landlord at Landlord's Address or at such other address or to
such other agent as Landlord or Agent may theretofore have designated by written
notice to Tenant, with a copy to any first mortgagee of the Leased Premises, the
identity and address of which Tenant shall have received written notice.
21.6 Short Form Lease. This Lease shall not be recorded, but the parties
agree, at the request of either of them, to execute a Short Form Lese for
recording, containing the names of the parties, the legal description and the
term of the Lease.
21.7 Time of Essence. Time is of the essence of this Lease, and all
provisions herein relating thereto shall be strictly construed.
21.8 Relationship of Parties. Nothing contained herein shall be deemed or
construed by the parties hereto, or by any third party, as creating the
relationship of principal and agent or of partnership, or of joint venture, by
the parties hereto, it being understood and agreed that no provision contained
in this Lease nor any acts of the Parties hereto shall be deemed to create any
relationship other than the relationship of landlord and tenant.
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21.9 Captions. The captions of this Lease are for convenience only and
are not to be construed as part of this Lease and shall not be construed as
defining or limiting in any way the scope and intent of the provisions hereof.
21.10 Severability. If any term or provision of this Lease shall to any
extent be held invalid or unenforceable, the remaining terms and provisions of
this Lease shall not be affected thereby, but each term and provision of this
Lease shall be valid and be enforced to the full extent permitted by law.
21.11 Law Applicable. This Lease shall be construed and enforced in
accordance with the laws of the state where the Leased Premises are located.
21.12 Covenants Binding on Successors. All of the covenants, agreements,
conditions and undertakings contained in this Lease shall extend and inure to
and be binding upon the heirs, executors, administrators, successors and assigns
of the respective parties hereto, the same as if they were in every case
specifically named, and wherever in this Lease reference is made to either of
the parties hereto, it shall be held to include and apply to, wherever
applicable, the heirs, executors, administrators, successors and assigns of such
party. Nothing herein contained shall be construed to grant or confer upon any
person or persons, firm, corporation or governmental authority, other than the
parties hereto, their heirs, executors, administrators, successors and assigns,
any right, claim or, privilege by virtue of any covenant, agreement, condition
or undertaking in this Lease contained.
21.13 Brokerage. Tenant warrants that it has had no dealings with any
broker or agent in connection with this Lease. Tenant covenants to pay, hold
harmless, indemnify and defend Landlord from and against any and all costs,
expenses or liability for any compensation, commissions and charges claimed by
all brokers and agents with respect to this Lease or the negotiation thereof.
21.14 Landlord Means Owners. The term "Landlord" as used in this Lease, so
far as covenants or obligations on the part of the Landlord are concerned, shall
be limited to mean and include only the owner or owners at the time in question
of the fee of the Leased Premises, and in the event of any transfer or transfers
of the title to such fee, Landlord herein named (and in case of any subsequent
transfer or conveyances, the then grantor) shall be automatically freed and
relieved, from and after the date of such transfer or conveyance, of all
liability as respects the performance of any covenants or obligations on the
part of Landlord contained in this Lease thereafter to be performed; provided
that any funds in the hands of such Landlord or the then grantor at the time of
such transfer, in which Tenant has an interest, shall be turned over to the
grantee, and any amount then due and payable to Tenant by Landlord or the then
grantor under any provisions of this Lease shall be paid to Tenant.
21.15 Lender's Requirements. If any mortgagee or committed financier of
Landlord should require, as a condition precedent to the closing of any loan or
the disbursal of any money under any loan, that this Lease be amended or
supplemented in any manner (other than in the description of the Leased
Premises, the term, the purpose or the rent or other charges hereunder, or in
any other regard as will substantially or materially affect the rights of Tenant
under this Lease), Landlord shall give
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written notice thereof to Tenant, which notice shall be accompanied by a Lease
Supplement Agreement embodying such amendments and supplements. Tenant shall,
within ten (10) days after the effective date of Landlord's notice, either
consent to such amendments and supplements (which consent shall not be
unreasonably withheld) and execute the tendered Lease Supplement Agreement, or
deliver to Landlord a written statement of its reason or reasons for refusing to
so consent and execute. Failure of Tenant to respond within said ten (10) day
period shall be a default under this Lease without further notice. If Landlord
and Tenant are then unable to agree on a Lease Supplement Agreement satisfactory
to each of them and to the lender within thirty (30) days after delivery of
Tenant's written statement, Landlord shall have the right to terminate this
Lease within sixty (60) days after the end of said thirty (30) day period.
21.16 Signs. Tenant shall install no exterior sign without Landlord's
prior written approval of detailed plans and specifications therefor. If
Landlord has a standard form of identity sign for tenants in the industrial park
of which the Leased Premises are a part, and if Tenant desires to have an
identity sign on the Leased Premises, Tenant shall advise Landlord of the name
it desires to have on its sign, and Landlord shall install its standard sign
showing such name. Tenant shall reimburse Landlord for Landlord's costs of
producing and erecting said sign within ten (10) days after being billed
therefor by Landlord.
21.17 Force Majeure. Landlord shall not be deemed in default with respect
to any of the terms, covenants and conditions of this Lease on Landlord's part
to be performed. if Landlord's failure to timely perform same is due in whole or
in part to any strike, lockout, labor trouble (whether legal or illegal), civil
disorder, failure of power, restrictive governmental laws and regulations,
riots, insurrections, war, shortages, accidents, casualties, acts of God, acts
caused directly by Tenant or Tenant's agents, employees and invitees, or any
other cause beyond the reasonable control of Landlord.
21.18 Landlord's Expenses. Tenant agrees to pay on demand Landlord's
expenses, including reasonable attorneys' fees, expenses and administrative
hearing and court costs incurred either directly or indirectly in enforcing any
obligation of Tenant under this Lease, in curing any default by Tenant as
provided in Section 19.4, in connection with appearing, defending or otherwise
participating in any action or proceeding arising from the filing, imposition,
contesting, discharging or satisfaction of any lien or claim for lien, in
defending or otherwise participating in any legal proceedings initiated by or on
behalf of Tenant wherein Landlord is not adjudicated to be in default under this
Lease, or in connection with any investigation or review of any conditions or
documents in the event Tenant requests Landlord's agreement, approval or consent
to any action of Tenant which may be desired by Tenant or required of Tenant
hereunder.
21.19 Execution or Lease by Landlord. The submission of this document for
examination and negotiation does not constitute an offer to lease, or a
reservation of, or option for, the Leased Premises and this document shall
become effective and binding only upon the execution and delivery hereof by
Tenant and by Landlord. All negotiations, considerations, representations and
understandings between Landlord and Tenant are incorporated herein.
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21.20 Tenant's Authorization. Tenant shall furnish to Landlord. within ten
(10) days after written request therefor from Landlord, certified resolutions of
Tenant's directors or other governing person or body authorizing execution and
delivery of this Lease and performance by Tenant of its obligations hereunder,
and evidencing that the person who physically executed the Lease on behalf of
Tenant was duly authorized to do so.
Landlord and Tenant have executed this Lease the day and year first above
written.
LANDLORD: KENNETH A. HENDRICKS and DIANE M. HENDRICKS,
d/b/a HENDRICKS COMMERCIAL PROPERTIES
By:
------------------------------------------
Kenneth A. Hendricks
By:
------------------------------------------
Diane M. Hendricks
TENANT: AMERICAN BUILDERS & CONTRACTORS SUPPLY
CO., INC.
By:
------------------------------------------
Kenneth A. Hendricks
President, Chief Executive Officer and
Sole Shareholder
ATTEST:
By:
--------------------------
Diane M. Hendricks,
Executive Vice-President
and Secretary
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STATE OF WISCONSIN )
) SS.
COUNTY OF ROCK )
I, ________________________________________, a Notary Public in and for
said County, in the State aforesaid, do hereby certify that Kenneth A. Hendricks
and Diane M. Hendricks, personally known to me to be the same persons whose
names are subscribed to the foregoing instrument, appeared before me this day in
person and acknowledged that they signed, sealed and delivered the said
instrument as their free and voluntary act, for the uses and purposes therein
set forth.
GIVEN under my hand and Notarial Seal this _________ day of
____________________, 19__.
------------------------------------
Notary Public
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STATE OF WISCONSIN )
) SS.
COUNTY OF ROCK )
I, ________________________________________, a Notary Public in and for
said County, in the State aforesaid, do hereby certify that Kenneth A.
Hendricks, personally known to me to be the President, Chief Executive Officer
and sole shareholder of American Builders & Contractors Supply Co., Inc., a
Delaware corporation, and Diane M. Hendricks, personally known to me to be the
Secretary of said corporation and personally known to me to be the persons whose
names are subscribed to the foregoing instrument, appeared before me this day in
person and severally acknowledged that they signed and delivered the said
instrument as President, Chief Executive Officer and Sole shareholder, and
Executive Vice President and Secretary respectively of said corporation, and
caused the Corporate Seal of said corporation to be affixed thereto, pursuant to
authority given by the Board of Directors of said corporation, as their free and
voluntary act and as the free and voluntary act and deed of said corporation,
for the uses and purposes therein set forth.
GIVEN under my hand and Notarial Seal this _____ day of____________, 19__.
----------------------------------
Notary Public
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EXHIBIT A
LEGAL DESCRIPTION OF THE LEASED PREMISES
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EXHIBIT B
SITE PLAN OF THE LEASED PREMISES
See the following ____ page(s) attached hereto and made a part hereof.
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