LEASE AGREEMENT
The
date of this Lease Agreement is January 23, 2007. The parties
to this Lease are Asch Partnership, a Vermont general
partnership (the "Landlord"), and Twincraft, Inc., a Vermont
corporation (the "Tenant").
Recitals
A.
The
Landlord is the owner of lands and premises at 2 Tigan Street
in Winooski, Vermont (the "Premises") more fully described in
Exhibit A.
B.
The
Landlord desires to lease the Premises to the Tenant pursuant
to the terms of this Lease Agreement.
C.
The
Tenant desires to lease the Premises from the Landlord
pursuant to the terms of this Lease Agreement
.
D.
The
Landlord desires to grant the Tenant an option to purchase the
Premises.
Terms and Provisions
NOW,
THEREFORE, the parties agree as follows:
ARTICLE 1
Lease Definitions
Section 1.01.
Definitions.
As
used in this Lease Agreement, the following capitalized terms
shall have the meanings set forth below:
Additional Rent :
As set forth in Section 4.03.
Base Rent :
As set forth in Section 4.01.
Building :
The building located at the Premises including its mechanical,
electric, plumbing and other systems and equipment.
Commencement Date :
As set forth in Section 3.01.
Index :
As set forth in Section 3.02.
Initial Term :
As set forth in Section 3.01.
Extended Term :
As set forth in Section 3.02.
Governmental Authority :
Any government, governmental or quasi-governmental
authority, including,
without limitation, any federal, state, territorial, county,
municipal or other government or governmental agency, board,
branch, bureau, commission, court, department or other
instrumentality or political unit or subdivision, whether domestic
or foreign.
Hazardous Substances :
As set forth in Section 5.02.
Insurance Requirements :
All terms of any insurance policy covering the Lessee or covering
or applicable to the Premises or any part thereof, all requirement
of the issuer of any such policy, and all orders, rules,
regulations and other requirements of the National Board of
Underwriters (or any other body exercising similar functions)
applicable to or affecting the Premises or any part thereof or any
use or condition of the Property or any part thereof.
Land :
The lot of land on which the Building is located.
Lease Agreement :
This lease, as amended or extended from time to time.
Legal Requirements :
All federal, state, county, municipal or other government or
governmental statues, laws, rules, regulations, ordinances,
judgments, decrees and injunctions affecting the Premises or the
use thereof (other than for purposes not permitted by this Lease
Agreement), including the Board of Fire Underwriters or its
equivalent, whether now or hereafter enacted and in force,
including without limitation any which may require repairs,
modifications or alterations (structural or otherwise) in or to the
Premises, the Building or the Land, and all permits, licenses,
authorizations and regulations relating thereto; any which deal
with environmental matters and/or Hazardous Substances; the
Americans with Disabilities Act of 1990 ("ADA"), and all the
covenants, agreements, restrictions and encumbrances contained in
any instruments (whether or not of record) at any time in force
affecting the Premises.
Lease Year :
Each twelve (12) month period commencing on the first day of the
first full calendar month of the Term and on each anniversary of
such day, as the case may be.
Mortgage :
An interest in real estate of the Landlord which secures payment or
performance of an obligation, however denominated.
Person :
Any association, business, trust, company, corporation, estate,
governmental authority, joint venture, natural person, general or
limited partnership or general partnership, association, or other
entity.
Premises :
The Building, the Land and all real property interests related
thereto, as set forth in Recital A.
Rent :
All Base Rent, Additional Rent and all other sums due pursuant to
this Lease.
Rent Commencement Date :
As set forth in Section 3.01.
Taxes: All
real estate taxes, special assessments, special taxes and similar
taxes or fees, as each may be assessed against (i) the Premises, or
(ii) the Tenant's leasehold interest or any fixtures, furnishings,
equipment or other personal property owned, installed or used in or
on the Premises; whether general or special, ordinary or
extraordinary, foreseen or unforeseen, of every
character.
Taking :
A taking or voluntary conveyance of all or any part of the Land,
the Building or the Premises, or any interest therein or right
accruing thereto or use, as a result of or in lieu or in
anticipation of the exercise of the right or power of condemnation
or eminent domain, whether by the action of any governmental
authority or any other person having such right or
power.
Tenant's Property :
As set forth in Section 9.01.
Term :
As set forth in Section 3.01, as the same may be extended or
shortened as provided in this Lease or pursuant to
law.
Termination Date :
The date on which the Term expires or is earlier terminated
pursuant to this Lease or pursuant to law.
Unavoidable Delays :
Delays due to strikes, acts of God, governmental restrictions,
enemy actions, civil commotion, fire, or other causes beyond the
control of the Landlord, provided that (a) lack of sufficient funds
shall not be deemed an Unavoidable Delay, and (b) no Unavoidable
Delay other than postal strike or strike of banking workers shall
constitute an Unavoidable Delay as to any payment of money due
pursuant to this Lease.
ARTICLE 2
Demise of Premises
Section 2.01.
The Premises .
Upon
and subject to the conditions and limitations set forth below,
the Landlord leases to the Tenant, and the Tenant rents from
the Landlord, the Premises, to have and to hold the Premises
unto the Tenant, subject to all of the terms, conditions and
provisions hereof, for the Term.
ARTICLE 3
Term
Section 3.01.
Initial Term.
(a)
Subject
to the provisions of this Lease, the Tenant shall have and
hold the Premises for an initial term commencing on the date
hereof (the " Commencement
Date" ).
(b)
The
initial term of this Lease (the "Initial Term") shall be for a
period of seven (7) years, commencing on the Commencement Date
and expiring, if not sooner terminated, on the seventh
anniversary of the last day of the month in which the
Commencement Date occurs.
(c)
Promptly
after the Commencement Date and the termination date of the
Initial Term have been determined, the Landlord and the
Tenant, on the request of either, will execute a memorandum of
lease in recordable form, setting forth the information listed
in 27 VSA § 341(c) and the non-disturbance provisions set
forth in Article 18.
Section 3.02.
Extended Term.
(a)
If
at the time an Event of Default has not occurred, or if
occurred has been remedied within the applicable notice and
cure period or to the reasonable satisfaction of the Landlord,
the Tenant shall have the option to extend the term of this
Lease for one (1) additional period of seven (7) years at the
option of the Tenant (the "Extended Term"). The option to
extend the term shall be deemed to have been exercised if the
Tenant gives the Landlord written notice of exercise at no
earlier than one (1) year, nor later than six (6) months,
prior to the expiration of the Initial Term.
(b)
The
Extended Term shall be on all the same terms and conditions as
in effect during the Initial Term, except that for the first
year during the Extended Term, the Base Rent (as defined
below) shall be adjusted by increasing the Base Rent in effect
at the end of the Initial term by three percent (3%). For each
successive year of the Extended Term, the Base Rent (as
increased in prior years) shall be increased by three percent
(3%).
ARTICLE 4
Rent
Section 4.01.
Base Rent.
(a)
The
Tenant will pay to the Landlord, without demand, at the office
of the Landlord or at such other place as may be designated by
the Landlord, in equal monthly installments on the first day
of each month during the term of this lease, in advance, base
rent ("
Base Rent ")
during the Initial Term at the annual rates, as
follows:
2007
$362,000.00.
2008
$452,500.00.
2009
$452,500.00.
2010
$452,500.00.
2011
$452,500.00.
2012
$452,500.00.
2013
$452,500.00.
(b)
If
the Commencement Date occurs on a day other than the first day
of a calendar month, then Tenant shall pay a pro rata portion
of the Base Rent, from the Commencement Date to the end of the
month in which the Commencement Date occurs.
Section 4.02.
Rent; Manner of Payment; Late Charges.
The
Base Rent and all other sums payable to the Landlord shall be
paid to the Landlord at the Landlord's address set forth in
Section 21.01 or to such agent or person or persons or at such
other address as the Landlord may designate from time to time.
In the event that the Base Rent, Additional Rent or any other
sum due pursuant to this Lease is not paid within 15 days
after it is due and such failure to pay is not cured within
ten (10) days following written notice to Tenant, then the
Tenant shall pay to the Landlord, as Additional Rent, a late
payment fee in a sum equal to five percent (5%) thereof; such
sum shall be liquidated damages and not a penalty and tender
thereof by the Tenant or acceptance thereof by the Landlord
shall not prejudice the Landlord's rights pursuant to Section
15.01.
Section 4.03.
Additional Rent.
This
Lease is a net lease and the Tenant shall pay, before any
fine, penalty, interest or cost may be added for nonpayment
and including interest and penalties thereon, all costs and
charges, Taxes (including the Taxes referred to in Section 7),
assessments, water and sewer rents, rates and charges, charges
for public utilities and other charges and fees, of any kind
and nature whatsoever, for the payment of which the Landowner,
as owner, or the Tenant, as occupant or user, is or shall
become liable by reason of their respective estates, rights,
titles or interests in the Premises pursuant to this Lease
(the "Additional Rent"). In the event of any failure on the
part of the Tenant to pay any Additional Rent, and such
failure to pay is not cured within ten (10) days following
written notice to Tenant, the Landlord shall have all the
rights, powers and remedies provided for in this Lease or at
law or in equity or otherwise in the case of non-payment of
Basic Rent. Notwithstanding anything to the contrary contained
in this Section 4.04 or elsewhere in this Lease, Additional
Rent shall not include the following costs and expenses:
Landlord's income or comparable taxes; the expenses of
Landlord's compliance with its repair, replacement, and
improvement obligations pursuant to Section 6.01, or
Landlord's financing costs, including interest
expenses.
Section 4.04.
No Counterclaim, Abatement, etc.
The
Base Rent, Additional Rent and all other sums payable
hereunder shall be paid without notice or demand, counterclaim
(except compulsory counterclaims), set off, deduction or
defense and without abatement, suspension, diminution or
reduction, and the obligations and liabilities of the Tenant
hereunder shall in no way be released, discharged or otherwise
affected (except as otherwise expressly provided
herein).
ARTICLE 5
Use of Premises
Section 5.01.
Acceptance of the Premises.
The
Tenant, by its execution of this Lease, hereby confirms as
follows: Its occupancy of the Premises shall constitute its
acceptance thereof; the Premises were delivered in good and
clean order and condition; and that the Premises comply in all
respects with the requirements of this Lease. This Section
shall not, however, constitute any waiver by the Tenant of the
covenants and warranties given by the Landlord in Section
16.01. In the event that the terms and conditions of this
Section are inconsistent with the terms and conditions of
Section 16.01, Section 16.01 shall control.
Section 5.02.
Use of Building and Premises.
(a)
The
Premises will be used for production, warehouse and office
space and uses related to the Tenant
= s
manufacturing business, and for such other purposes to which the
Landlord may consent, which consent will not be unreasonably
withheld or delayed.
(b)
The
Tenant represents and warrants to the Landlord that the Tenant
will not bring to, store at or otherwise emplace and bring any
asbestos, or any other dangerous, hazardous, noxious or toxic
materials, chemical, substances, pollutants or wastes which
pose a hazard to the health and safety of the occupants of the
Building as the same may be defined from time to time by any
governmental authority (" Hazardous
Substances" )
into the Building. " Hazardous
Substances" shall
not include incidental quantities of substances which are
commonly used in offices, such as copier fluid, typewriter
correction fluids and ordinary cleaning solvents, provided
that such are at all times used, kept and stored in a manner
which complies with all applicable legal requirements.
Removal, containment or abatement of Hazardous Substances
shall be done in compliance with (i) all applicable Legal
Requirements and (ii) the performance prescribed by a
contractor licensed and certified in the jurisdiction in which
the Leased Premises is located to remove, contain or abate
such Hazardous Substances. All employees hired by such
contractor shall be certified in accordance with all
applicable Legal Requirements and custom for projects
involving the movement, containment or abatement of Hazardous
Substances, the contractor shall keep and maintain all
necessary records and procedures required by all applicable
Legal Requirements. If at any time during or after the Initial
Term or any Extended Term the removal, containment or
abatement of any Hazardous Substances located on or in the
Leased Premises that the Tenant brought or caused to be
brought to the Leased Premises is required by any Legal
Requirement, the Tenant shall proceed to remove, contain or
abate the same as required by applicable Legal Requirements.
Tenant shall not be responsible for any Hazardous substances
or other environmental condition that existed prior to
Tenant’s possession.
(c)
The
Tenant shall not commit or suffer to be committed any waste
upon the Premises or do or permit any action which would
materially diminish the interests of the Landlord in the
Premises.
(d)
The
Tenant shall at any time and from time to time, upon not less
than twenty days' prior written request by the Landlord,
execute, acknowledge and deliver to the Landlord a statement
in writing, certifying (i) that this Lease is unmodified and
in full effect (or, if there have been modifications, that
this Lease is in full effect as modified, setting forth such
modifications), (ii) the dates to which Base Rent and
Additional Rent has been paid, (iii) that to the knowledge of
the signer of such certificate no default by either the
Landlord or the Tenant exists hereunder or specifying each
such default of which the signer may have knowledge, (iv) the
remaining Term hereof, (v) to the knowledge of the signer of
such certificate, there are no proceedings pending or
threatened against the Tenant before or by any court or
administrative agency which if adversely decided would
materially and adversely affect the financial condition and
operations of the Tenant or if any such proceedings are
pending or threatened to said signer's knowledge, specifying
and describing the same, and (vi) such other matters as may
reasonably be requested by the party requesting the
certificate. It is intended that any such statements may be
relied upon by any mortgagee or the Landlord or their
assignees or by any prospective purchaser, assignee or
subtenant of the Premises.
(e)
The
Tenant shall be permitted to install, at its sole cost and
expense, all signage consistent with applicable Legal
Requirements.
(f)
Ex cept
as provided in this paragraph below, the Landlord, at its
expense, will promptly (i) comply with all Legal Requirements
and Insurance Requirements (in a manner that minimizes to the
extent practicable any disruption of the Tenant's use of the
Premises) and (ii) procure, maintain, and comply with all
permits, licenses, and other authorizations for the use of the
Premises. Notwithstanding the previous sentence, the Tenant,
at its expense, will promptly comply with all Legal
Requirements and Insurance Requirements related to any change
in the use of the Premises after the Commencement Date, its
responsibilities for maintenance and repair under this Lease,
and any improvements installed by the Tenant at the
Premises.
ARTICLE 6
Maintenance and Repairs; Alterations
Section 6.01.
Care of Building, Parking Lot, and Premises.
(a)
The
Landlord shall, at its sole expense, be responsible for the
following: all necessary repairs, replacements, and
improvements to the structural elements of the Building,
including, without limitation, the roof, the foundation, and
all exterior glass and other surfaces; all capital repairs,
replacements, and improvements to the cooling towers,
condensers, compressors and related elements of the HVAC
system for the Building, the boiler, the HVAC control system
(excluding the heat pumps), the electrical switching
equipment, and the sidewalks and paved parking area; and all
repairs, replacements, and improvements covered by any
warranty from the Landlord's contractors or sub-contractors.
The Tenant shall be responsible for ordinary, routine
maintenance and non-capital repairs to the cooling towers,
condensers, compressors and related elements of the HVAC
system for the Building, the boiler, the HVAC control system
including replacement of heat pumps, the electrical switching
equipment, and the sidewalks and paved parking area, and shall
maintain in good order and repair all portions of the Premises
that are not the responsibility of the Landlord, reasonable
wear and tear excepted.
(b)
The
Tenant shall take good care of the Premises and its
improvements, alterations, trade fixtures, furniture,
machinery and equipment, and shall repair and maintain the
same at its expense. All damage or injury to the Premises
caused by the Tenant moving property into or out of the
Premises or by installation or removal of furniture, fixtures,
or other property, or resulting from fire, explosion, short
circuits, flow or leakage of water, steam, gas, sewerage, or
by frost or by bursting or by leaking of pipes or plumbing, or
from any other cause of any other kind or nature whatsoever,
due to carelessness, omissions, neglect, improper conduct, or
other cause of the Tenant, its servants, employees, agents,
visitors, or licensees, shall be repaired, restored, or
replaced promptly by the Tenant, to the reasonable
satisfaction of the Landlord and at the Tenant's sole cost and
expense, except to the extent such cost and expense is covered
by proceeds of insurance recovered by or for the benefit of
the Landlord. Without limiting the generality of the
foregoing, the Tenant shall, at its sole expense:
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(i)
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keep
the Building and the parking area, including the entrance area to
the Building and any adjoining sidewalks and landscaped areas,
clean, neat, properly-lighted, well-maintained, and free from snow,
ice and debris;
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(ii)
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not
permit awnings, air-conditioning units, fans or other projections
to be attached to the outside walls of the Building;
and
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(iii) |
not
permit, in any way, defacing of the Building or the parking
area.
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Section 6.02.
Alterations and Improvements.
(a)
The
Tenant may make alterations or improvements to the Premises
provide that the same do not affect any structural components
of the Building or the Premises provided that any such
alteration or improvement shall (i) not change the general
character of the Premises, or reduce the fair market value
thereof below its value immediately before such alteration or
addition, or impair the usefulness of the Premises; (ii) is
effected with due diligence, in a good and workmanlike manner
and in compliance with all Legal Requirements; and (iii) is
promptly and fully paid for by the Tenant. The Landlord's
failure to object to a written notice from the Tenant
requesting the Landlord's consent to any alterations or
improvements that do affect structural components, within 15
days of such request, shall constitute an approval of the
same. On expiration or earlier termination of this Lease, the
Tenant shall have the right to remove any improvements,
alterations, trade fixtures, furniture, machinery and
equipment installed within the Premises by and at the expense
of the Tenant, provided that the Tenant shall repair any
damage caused to the Premises or the Building in effecting
such removal, and provided, further, that the Tenant shall not
have the right so to remove any structural component,
partition, or any portion of the HVAC, plumbing, electrical or
mechanical systems.
(b)
All
improvements, alterations, trade fixtures, furniture,
machinery and equipment of the Tenant located at the Leased
Premises 30 days following expiration or earlier termination
of this Lease shall be considered abandoned by the Tenant and
may be appropriated, sold, destroyed, or otherwise disposed of
by the Landlord without obligation to account therefor, and
the Tenant will pay the Landlord, upon demand, all reasonable
costs and expenses incurred by the Landlord in removing,
storing or disposing of any of the foregoing.
ARTICLE 7
Utilities and Services; Taxes
Section 7.01.
Utilities and Services.
The
Tenant shall pay or cause to be paid all charges for all
public or private utility services at any time rendered to or
in connection with the Premises or any part thereof, shall
comply with all contracts and tariffs relating to such
services and shall do all other things required for the
maintenance and continuation of all such services. In the
event that any utility service for the Premises is provided
for or through the Landlord, the Tenant shall pay to the
Landlord, as Additional Rent, the Landlord's cost
therefor.
Section 7.02.
Taxes.
The
Tenant shall pay, as Additional Rent for each year of this
Lease, all Taxes assessed against the Premises. The Tenant
shall pay all sums due pursuant to this Section not later than
10 days prior to the date due and payable to the taxing
authority. The Tenant may, at its sole expense, contest (after
prior written notice to the Landlord) by appropriate legal
proceedings conducted in good faith and with due diligence,
the amount or validity of application, in whole or in part, of
any Tax or lien thereof affecting the Premises or
an
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