PLANT PARCEL LEASE AGREEMENT

 

LEASE

 

Table of Contents

 

		Page
Article I
Definitions		1
Article II
Lease, Effective Date, Lease Term, Rent and Security
Section 2.1	Lease, Effective Date and Lease Term	2
Section 2.2	Rent	2
Section 2.3	Security	2
Section 2.4	Remittances	3
Section 2.5	Failure of Improvement Financing	3
Article III
Section 3.1	Lessee’s Obligations Unconditional	3
Article IV
Maintenance, Taxes and Insurance
Section 4.1	Maintenance and Modifications of Leased Premises by Lessee	4
Section 4.2	Taxes, Governmental and Utility Charges	4
Section 4.3	Insurance Required	5
Section 4.4	Advances by Lessor	5
Section 4.5	Developers Fee	6
Article V
Damage, Destruction and Condemnation
Section 5.1	Damage and Destruction	6
Section 5.2	Condemnation	6
Article VI
Events of Default and Remedies
Section 6.1	Events of Default Defined	7
Section 6.2	Remedies on Default	8
Section 6.3	No Remedy Exclusive	8
Section 6.4	Attorneys’ Fees and Expenses	8
Article VII
Options in Favor of Lessee
Section 7.1	Option to Convert	8
Section 7.2	Option to Purchase	9
Section 7.3	Conveyance	9
Section 7.4	Termination Fee	9

 

 

		Page
Article VIII
Special Covenants and Conditions
Section 8.1	No Warranty of Condition or Suitability	9
Section 8.2	Sale or Assignment	9
Section 8.3	Sublease	9
Section 8.4	Quiet Enjoyment	9
Section 8.5	Memorandum of Lease	9
Section 8.6	Indemnification and Waiver of Claim	9
Section 8.7	Environmental Hazards	10
Section 8.8	Binding Effect	11
Section 8.9	Notices	11
Section 8.10	Entire Contract	11

 

 

AMENDED AND RESTATED

LEASE

 

THIS AMENDED AND RESTATED LEASE (“Lease”) is made and entered into as of March 1, 2009, between GREATER ERIE INDUSTRIAL DEVELOPMENT CORPORATION, a Pennsylvania non-profit corporation, of Erie County, Pennsylvania, Lessor

 

AND

 

ACCURIDE ERIE, L.P., a Delaware limited partnership, of Erie County, Pennsylvania, Lessee, and unconditionally guaranteed by Accuride Corporation, Guarantor.

 

WITNESSETH :

 

Lessor and Lessee are parties to that certain Lease dated as of March 31, 2005 (“Original Lease”) and have determined to amend and restate the Original Lease in connection with (i) substantial renovations and improvements (collectively “Improvements”) being undertaken with respect to the Buildings and Real Estate which constitute the Leased Premises, and (ii) the financing thereof, including this Lease.  Therefore, INTENDING TO BE LEGALLY BOUND HEREBY, and in consideration of the respective representations and agreements hereinafter contained, the parties hereto amend and restate the Original Lease and agree as follows (provided, that in the performance of the agreements of Lessor, any obligations it may thereby incur for the payment of money shall not be a general debt on its part, but shall be payable solely out of the proceeds derived from this Lease and the insurance and condemnation awards as herein provided):

 

ARTICLE I

 

DEFINITIONS

 

Capitalized words used but not defined herein shall have the meanings given them in the Original Lease.  The following words and phrases shall have the following meanings in this Lease (unless the context shall clearly require otherwise):

 

“Buildings” means those structures, buildings, and improvements and all other facilities which are presently located on the Real Estate, and the Improvements.

 

“Improvements” means those certain plant expansion plans, renovations, repairs and improvements to the Buildings more specifically described on Exhibit 1-A hereto.

 

“Improvements Financing” means the principal amount and all interest charges through maturity of the loans, grants and other funding sources used to finance design, engineering, planning and construction of the Improvements, together with all fees, charges, expenses, and other costs associated with such sources including but not limited to fees of legal counsel, engineering fees, application fees, appraisal fees, placement fees, development fees and the like, and actually incurred in connection with the financing of the Improvements.  The sources of Improvements Financing are as generally outlined in the February 2, 2009 letter from Lessor to Lessee which is attached as Exhibit 1-B .  The parties acknowledge that the terms and conditions of the Improvements Financing shall require the grant of mortgages, security

 

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interests, assignments of leases (including this Lease), collateral assignment of deposit, and such other security documents as the Improvements Financing lender shall require, and they consent to the same.

 

“Premises” or “Leased Premises” means collectively the Buildings (including the Improvements), and the Real Estate leased by Lessor to Lessee under this Lease.

 

“Real Estate” means all that certain piece or parcel of land located in the City of Erie, County of Erie and State of Pennsylvania, as more particularly described in Exhibit “1-C” attached hereto and made a part hereof, with all easements and other rights related thereto.  With respect to the Real Estate, Lessor and Lessee acknowledge: (i) receipt of the “Act 2” clearance, a copy of the letter which evidences same being attached as Exhibit 1-D ; and (ii) the preexisting lease between Kaiser, as Lessor, and Liberty Iron and Metal, as Lessee, of approximately 1.35 acres of the Real Estate for equipment storage, more particularly described in Exhibit “1-E” attached hereto.

 

ARTICLE II

 

LEASE, EFFECTIVE DATE, LEASE TERM, RENT AND SECURITY

 

Section 2.1             Lease, Effective Date and Lease Term .  Lessor hereby demises and leases the Leased Premises to Lessee effective upon the date this Lease is executed by Lessor and subject to the provisions of this Lease continuing for a term of fifteen (15) years and being subject to extension as set forth in Section 7.1 hereof.

 

Section 2.2             Rent .  Lessee agrees to pay to Lessor during the Lease Term, the sum of $326,994.84 [amortized amount of the Improvements Financing, plus GEIDC management fee] per year for nine (9) years and six (6) months as rent [for a total of 114 months], payable in the monthly amount of $27,249.57 due on the first day of each month, beginning March 1, 2009, net of all costs of maintenance, upkeep, repairs, replacements, insurance, utilities and taxes, together with all Additional Rent set forth in this Lease.  Lessee shall pay to Lessor all Additional Rent within thirty (30) days of receiving an invoice therefor, without setoff or deduction of any kind.  After the 114th month, lease payment shall be $1.00 per year; otherwise, on the same terms and conditions in this Lease.  Lessee shall also pay to Lessor a late fee of ten percent (10%) of any payment not made within forty-five (45) days of its due date.

 

Section 2.3             Security .  As security for the timely payment, performance, satisfaction and completion of all of Lessee’s obligations under this Lease, Lessee shall:

 

(a)           Cause Guarantor, its parent corporation, to duly execute and deliver an unconditional guaranty of Lessee’s obligations to pay the Rent under this Lease substantially in the form of Exhibit 2.3; and either

 

(b)           Pay to Lessor the sum of $595,000 cash (such sum being approximately equal to 24 months of the debt service for the Improvements Financing).  The deposit shall be the separate property of Lessor, free and clear of any claims of Lessee.  The deposit will nevertheless be concluded as security for the payment and performance of Lessee’s obligations to pay Rent under this Lease.  The Deposit shall not constitute an advance payment of any amounts owed by Lessee under this Lease, or a measure of damages to which

 

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Lessor shall be entitled upon the occurrences of any event of default under this Lease.  Lessor may, without prejudice to any other remedy available to it under this Lease, the Guaranty or otherwise, use the Deposit to the extent necessary to remedy any default in the payment of Rent, and Lessee shall restore the amount of the Deposit to its then proper amount within 30 days of written notice, taking into account remittances previously made, all as reasonably determined by Lessor; or

 

(c)           Issue to Lessor an instrument of collateral (“Collateral Instrument”) acceptable by both parties, such as an irrevocable Letter of Credit or a Certificate of Deposit, in the amount of $595,000 (such sum being approximately equal to 24 months of the debt service for the Improvements Financing).  The Collateral Instrument shall be automatically renewable on a yearly basis.  The Collateral Instrument will serve as security for the payment and performance of Lessee’s obligations to pay Rent under this Lease. The Collateral Instrument shall not constitute an advance payment of any amounts owed by Lessee under this Lease, or a measure of damages to which Lessor shall be entitled upon the occurrences of any event of default under this Lease.  Lessor may, without prejudice to any other remedy available to it under this Lease, the Guaranty or otherwise, use the Collateral Instrument to the extent necessary to remedy any default in the payment of Rent, and Lessee shall promptly, on demand, restore the amount of the Letter of Credit to its then proper amount, taking into account remittances previously made, all as reasonably determined by Lessor.

 

Section 2.4             Remittances/Reductions .  Provided no Event of Default has occurred and is continuing, on the first one year anniversary of the Effective Date of this Lease and continuing on the same date each year during the term, Lessor will remit to Lessee a portion of the Deposit.  The amount remitted shall be as set forth in Schedule 2.4 to this Lease, plus the amount of interest actually earned thereon during the preceding year, if any.  If Lessee uses a Collateral Instrument in place of a Deposit, Lessee may reduce the value of the Collateral Instrument on an annual basis in accordance with Schedule 2.4 of this Lease.  The amount of any such remittance of the Deposit or reduction in the Collateral Instrument shall be determined by Lessor taking into account any charges made against the Deposit or Collateral Instrument, and prior remittances/reductions made.  Remittances/reductions shall be abated while an Event of Default has occurred and is continuing.

 

Section 2.5             Failure of Improvement Financing .  If the Improvement Financing, in whole or in part, does not close on or before June 30, 2009, then this Amended and Restated Lease shall be null and void as if never executed, rent paid pursuant hereto returned to Lessee, and the Lease dated March 31, 2005 shall remain in full force and effect.  For purposes of this Section, the parties agree that Improvement Financing may include bridge or interim financing.

 

ARTICLE III

 

LESSEE’S OBLIGATIONS UNCONDITIONAL

 

Section 3.1             The obligation of Lessee to pay the rental and other payments required by Section 2.2 and to perform and observe all other agreements on its part contained in this Lease, shall be absolute and unconditional.  During the Lease Term, or any renewal thereof, Lessee:

 

(a)                                   Will not suspend or discontinue any payments provided in Section 2.2 or Article IV hereof,

 

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(b)                                 Will perform and observe all its other agreements contained in this Lease, and

 

(c)                                  Will not terminate the Lease Term for any reason or cause, including, without limitation, failure of Lessor to perform any of its express or implied agreements herein after delivery of possession, any failure of consideration, destruction of or damage to the Buildings or the Improvements, failure to complete the Improvements, commercial frustration of purpose, failure of consideration or any change in the tax or other laws of the United States or the Commonwealth of Pennsylvania or any political subdivisions of either.

 

ARTICLE IV

 

MAINTENANCE, TAXES AND INSURANCE

 

Section 4.1             Maintenance and Modifications of Leased Premises by Lessee .  Lessee agrees that during the Lease Term it will at its own expense keep the Leased Premises in the condition required by applicable law.  Otherwise, Lessee shall maintain the Premises in a condition satisfactory to it.  Lessee may, also at its own expense, make from time to time any additions, modifications or improvements to the Buildings that it may deem desirable for its business purposes; provided that all such additions, modifications and improvements to the Building shall be located wholly within the boundary lines of the Leased Premises.  Lessee shall provide Lessor as-built engineering drawings for the Improvements, including but not limited to all modifications and improvements to the Buildings.  All such additions, modifications, and improvements so made by Lessee shall become a part of the Leased Premises; provided, Lessee may remove and/or replace all or any portion of the Buildings as it may from time to time choose in its sole discretion. Any real or personal property, machinery, equipment, furniture or fixtures installed by Lessee as part of the Leased Premises without expense to Lessor may be removed by Lessee at any time and from time to time.  Lessee will not permit any mechanics’ or other liens to be established or remain against the Leased Premises for labor or materials furnished in connection with any additions, modifications, improvements, repairs, renewals or replacements so made by it; provided, that, Lessee may in good faith contest any mechanics’ or other liens filed or established against the Leased Premises, and in such event may permit the items so contested to remain undischarged or unsatisfied during the period of such contest and any appeal therefrom.  Lessor will cooperate fully with Lessee in any such contest.

 

Section 4.2             Taxes, Governmental and Utility Charges .

 

(a)                                   Lessee will pay to Lessor as Additional Rent pursuant to Section 2.2 of this Lease, an amount equal to the ad valorem taxes levied by any political or taxing subdivision of Pennsylvania upon the Leased Premises.  This Additional Rent shall be paid not later than the due date of the taxes, and may be paid earlier subject to discount.

 

(b)                                  Lessee will pay as Additional Rent when they become due, any taxes or governmental charges or assessments of any nature lawfully levied against the Leased Premises or any activity conducted thereon.  Any and all such taxes and assessments may be paid directly to the political or taxing subdivision levying the tax or assessment, and a receipt therefor delivered to Lessor shall

 

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discharge Lessee’s obligation in connection therewith.  Lessee will further pay any and all utility charges when they become due.

 

(c)                                   Lessee may, at its expense and in its own name or in the name of Lessor, contest in good faith any such taxes, assessments or other charges, and may permit them to remain unpaid during such contest.  In any such contest, Lessor will cooperate fully with Lessee.

 

Section 4.3                                     Insurance Required .

 

(a)                                   Throughout the Lease Term, the Lessee shall keep the Leased Premises continuously insured against such risks as are customarily insured against by businesses of like size and type, paying as the same become due all premiums in respect thereto, including but not necessarily limited to:

 

(1)                                 Insurance upon the repair or replacement basis if available, and otherwise to the full insurable value of the insured property as determined by a recognized insurer selected by Lessee, against the loss or damage by fire and lightning, with uniform standard extended coverage endorsement limited only as may be provided in the standard form of extended coverage endorsement at the time in use in Pennsylvania.  Policies shall name Lessor and all lenders as additional insured, and

 

(2)                                 Comprehensive general liability insurance in an amount of not less than one million dollars, naming Lessor as an additional insured.

 

(b)                                  All insurance required by Section 4.3(a) hereof shall be taken out and maintained in generally recognized responsible insurance companies selected by the Lessee, reasonably acceptable to Lessor, and may be written with deductible amounts comparable to those on similar policies carried by other companies engaged in businesses similar in size, character and other respects to those in which Lessee is engaged.

 

All such policies or a certificate or certificates of the insurers that such insurance is in force and effect, shall be deposited with Lessor prior to expiration of any such policy, the Lessee shall furnish Lessor with evidence satisfactory to it, that the policy has been renewed or replaced or is no longer required by this Lease.

 

(c)                                   The Net Proceeds of the insurance carried pursuant to Section 4.3(a) shall be applied as follows:  (1) the Net Proceeds of the insurance required in Section 4.3(a)(1) shall be applied as provided in Section 5.1 hereof, and (2) the Net Proceeds of the insurance required in Section 4.3(a)(2) shall be applied for or toward the satisfaction of the liability involved.

 

(d)                                  In addition to the above insurance coverages, Lessee shall procure and maintain at all times this Lease is in effect the insurances specified on Schedule 4.3 hereof.  To the extent of a conflict between this Lease and Schedule 4.3 the Schedule shall control.

 

Section 4.4                                     Advances by Lessor .  In the event Lessee shall fail to pay any of the items required by any portion of this Article IV to be paid by

 

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Lessee, or shall fail to maintain and pay premiums for the full insurance required, or shall fail to keep the Leased Premises in as reasonably safe condition as its operating conditions will permit, or shall fail to keep the Buildings and Improvements in reasonably good repair and good operating condition, Lessor may (but shall not be under any obligation to) take out the required policies and pay the premiums thereon, or make the required repairs, renewals and replacements; and all amounts advanced therefor by Lessor shall become an additional obligation of Lessee to the Lessor, collectable as Additional Rent under Section 2.2.  With respect to any repairs or replacements relating to condition of the Leased Premises, Lessor shall give Lessee thirty (30) days written notice and an opportunity to cure the condition within that time period prior to taking any action under this Paragraph.

 

Section 4.5             Developers Fee .  In addition to rent and additional rent, Lessee shall pay to Lessor a Developer’s Fee of $70,300, which shall be due at the closing on the Improvement Financing.  The Developers fee shall compensate the Lessor for the following services related to the Improvements: coordination of design, bidding, inspection, materials testing, and construction; administration of change orders and submittals; fiscal administration for construction of improvement including loan draws, processing contractor payments, and administering retainage; permit applications and compliance; state grant and loan program compliance; administration of grant including preparing application, compliance monitoring, and requisitions for payment; and photo documentation of Improvements.

 

ARTICLE V

 

DAMAGE, DESTRUCTION AND CONDEMNATION

 

Section 5.1             Damage and Destruction .  If during the Lease Term, and unless Lessee shall have elected to exercise its option to purchase under Section 7.2 hereof, the Leased Premises is destroyed or damaged by casualty, then all proceeds of insurance shall be paid to and held by an escrow agent mutually acceptable to Lessor and Lessee, whereupon Lessee will promptly proceed to either (1) repair or rebuild the property to substantially the same condition as prior to the casualty, or (2) demolish all Buildings affected by the casualty which Lessee elects not to repair or rebuild.  The escrow agent shall apply as much as necessary of the insurance proceeds to the payment of the cost of such repair or demolition.  Any balance of the insurance proceeds remaining after such repair or demolition shall be paid to Lessee.

 

Section 5.2             Condemnation .  Unless Lessee shall exercise its option to purchase pursuant to Section 7.2 hereof, if title to or any interest in the Leased Premises or any part thereof shall be taken under exercise of the power of eminent domain, Lessee shall not be relieved of its obligation to make the rental payments specified in Section 2.2 hereof.  Lessor will cause the Net Proceeds received by it, from any award in such eminent domain proceedings, to be paid to Lessee.

 

Lessor shall cooperate fully with Lessee in any condemnation proceeding, and will not settle or consent to the settlement of any prospective or pending condemnation proceedings without the written consent of Lessee.

 

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ARTICLE VI

 

EVENTS OF DEFAULT AND REMEDIES

 

Section 6.1             Events of Default Defined .  The following shall be “events of default” under this agreement and the terms “event of default” or “default” shall mean, whenever they are used in this Lease, any one or more of the following events:

 

(a)                                   Failure by Lessee to pay the rents or additional rents required to be paid under Section 2.2 hereof upon the dates specified in said Section which failure to pay is not cured within ten (10) business days of Lessee’s receipt of Lessor’s written notice of such failure.

 

(b)                                  Failure by the Lessee to observe and perform any covenant, condition or agreement on its part to be observed or performed, other than as referred to in subsection (a) of this Section, for a period of thirty days after written notice, specifying such failure and requesting that it be remedied, given to Lessee by Lessor, unless Lessor shall agree in writing to an extension of such time prior to its expiration.

 

(c)                                   The dissolution or liquidation of Lessee or the filing by Lessee of a voluntary petition in bankruptcy, or failure by Lessee promptly to lift any execution, garnishment or attachment of such consequence as will impair its ability to carry on its operations at the Leased Premises, or the commission by the Lessee of any act of bankruptcy, or adjudication of Lessee as a bankrupt, or assignment by Lessee for the benefit of its creditors, or the entry by Lessee into an agreement of composition with its creditors, or the approval by a court of competent jurisdiction of a petition applicable to Lessee in any proceeding for its reorganization instituted under the provisions of the general bankruptcy act, as amended, or under any similar act which may hereafter be enacted.

 

(d)                                  The Lessee’s breach of any of the following agreements: Kaiser Property Environmental Matters Agreement dated March 31, 2005 (“Environmental Matters Agreement”), the Agreement Regarding Erie Property dated March 31, 2005 (“Erie Property Agreement”), and the Erie Property Insurance Agreement dated March 31, 2005 (“Insurance Agreement”); which breach(es) is not cured within sixty (60) business days of Lessee’s receipt of Lessor’s written notice of such failure.

 

The foregoing provisions of this Section are subject to the following limitations:  If by reason of force majeure Lessee is unable in whole or in part to carry out its agreements on its part herein contained, other than the obligations on the part of the Lessee contained in Article II and Section 4.2 and 4.3 hereof, the Lessee shall not be deemed in default during the continuance of such inability.  The term “force majeure” as used herein shall mean, without limitation, the following:  acts of God; strikes, lockouts or other industrial disturbances; acts of public enemies; orders of any kind of the government of the United States of Pennsylvania or any of their departments, agencies, or officials, or any civil or military authority; insurrections; riots; epidemics; landslides; lightning; earthquake; fire; hurricanes; storms; floods; washouts; droughts; arrests; restraint of government and people; civil disturbances; explosions; breakage or accident to machinery, transmission pipes or canals; partial or entire failure of

 

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utilities