This Lease Agreement involves
Title: LEASE AGREEMENT
Industry: Chemical Manufacturing Sector: Basic Materials
SECTION 1 ‑ GENERAL PROVISIONS, EXHIBITS, AND DEFINITIONS .
(a) Parties .
(i) Landlord: Sherman Properties, LLC
9090 Kephart Dr.
Mentor, OH 44060
Attn: Mr. Pete Sherman
(ii) Tenant: Powdermet, Inc.
24112 Tungsten Road
Euclid, Ohio 44123
Attn: Mr. Andrew Sherman
(b) Basic Lease Terms .
(i) Commencement Date of Lease : November 1, 2005
(ii) Term of Lease : fifteen (15) consecutive lease years, as defined in subsection 3(b) hereof.
(iii) Base Rent : As set forth on Exhibit B , payable in monthly installments.
(iv) Permitted Use : General commercial, manufacturing, warehouse and office purposes, subject to applicable zoning, environmental and building laws and ordinances.
(v) Premises : The Buildings and Building Site shown on Exhibits A-1 and A-2.
(c) Exhibits . The following exhibits are attached to this Lease and incorporated herein by reference.
EXHIBIT A-1 ‑ Legal Description of the Building Site.
EXHIBIT A‑2 - Plat Showing the Building and Building Site.
EXHIBIT B - Schedule of Rents
(d) Definitions . Unless otherwise expressly provided herein, or the context requires a different interpretation, the following definitions shall control the interpretation of this Lease.
(i) “Building” means, collectively, (i) the two story building consisting of approximately 11690 square feet base plus a 2945 sq ft mezzanine; (ii) the two story building consisting of approximately 32797 square feet; (iii) the related outbuildings, storage sheds and vaults located at 24112 Tungsten Road, Euclid Ohio 44123.
(ii) “Building Site” ‑ the approximately 10.5 acre area consisting of the Building and the adjacent parking areas and undeveloped land owned by Landlord, including all other buildings and improvements constructed thereon, as shown on the attached Exhibit A‑2 .
SECTION 2 ‑ LEASE OF PREMISES . For the rent and upon the terms and conditions set forth in this Lease, Landlord leases the Premises to Tenant and Tenant leases the Premises from Landlord.
SECTION 3 ‑ TERM OF LEASE .
(a) Commencement Date . The Commencement Date of the Lease is set forth in Section 1(b)(i) hereof.
(b) Lease Year . The first lease year shall begin on the Commencement Date and shall end on the last day of the twelfth full month following the Commencement Date of this Lease. Succeeding lease years shall each consist of a twelve (12) month period beginning with the first day of the month following the end of the prior lease year.
SECTION 4 ‑ BASE RENT .
(a) Base Rent . Tenant agrees to pay Landlord, without deduction or setoff, at the address shown in subsection 1(a)(i) or at such other place as Landlord may from time to time designate, the Base Rent set forth in Exhibit B hereof. Each monthly installment of Base Rent shall be paid in advance on or before the first day of the calendar month. Tenant’s obligation to pay rent shall begin on the Commencement Date of the Lease. It is the purpose and intent of Landlord and Tenant that the Base Rent shall be absolutely net to Landlord except for the items to be paid by Landlord and specifically set forth in this Lease Agreement, so that this Lease shall yield, net to Landlord, the Base Rent specified in Exhibit B hereof during the term hereof, and that all costs, expenses and charges of every kind and nature relating to the Building (other than those specifically assumed hereunder by Landlord) which may arise or become due during the term of this Lease shall be paid by Tenant, and that Landlord shall be indemnified and saved harmless by Tenant from and against the same.
(b) . For each of the first five (5) lease
years, after Landlord has paid all amounts due to the holder of any
note and mortgage secured by a lien against the Premises, all
amounts payable with respect real property taxes (or similar taxes)
imposed against the Building or the Building Site, any insurance
premiums with respect to the Building or the Building Site and any
Operating Expenses incurred by Landlord and not reimbursed by
Tenant, plus a reserve amount equal to thirty-five percent (35%) of
the total Base Rent paid by Tenant in such lease year, Landlord
shall deposit the remaining Base Rent paid by Tenant in a reserve
account (the “Reserve Account”) to be applied to make
alterations and improvements to the Premises. Landlord and
Tenant shall meet annually, no later than sixty (60) days after the
end of each such lease year, to determine one or more improvements
to the Premises to be completed by funds from the Reserve
Account. In the event of a dispute between Landlord and
Tenant with respect to the application of the funds in the Reserve
Account, Landlord shall have the right to apply such funds to such
improvements as Landlord, in its reasonable judgment, shall deem
SECTION 5 ‑
ADDITIONAL RENT. Any rents or other charges not included in Base
Rent which Tenant herein expressly or impliedly covenants or agrees
to pay howsoever the same may be denominated shall hereinafter be
referred to as “Additional Rent.” Landlord shall
have the same rights and remedies as are provided for herein at law
or in equity for the nonpayment of Additional Rent as Landlord
shall have for the nonpayment of Base Rent. All taxes,
premiums, charges, costs, and expenses which Tenant assumes or
agrees to pay under any provisions of this Lease, together with all
interest and penalties that may accrue thereon in the event of
Tenant’s failure to pay the same as herein provided, all
other damages, costs and expenses which Landlord may suffer or
incur, and any and all other sums which may become due, by reason
of any default of Tenant or failure on Tenant’s part to
comply with the agreements, terms, covenants, and conditions of
this Lease on Tenant’s part to be performed, and each or any
of them, shall be deemed to be Additional Rent. In addition
to the Base Rent, during the term of this Lease and any extension
or renewal hereof, Tenant shall pay all of the following expenses
incurred by the Landlord relating to the Premises (collectively,
“Operating Expenses”) all costs and expenses of any
kind, nature, and description incurred by the Landlord in
connection with the maintenance, operation, care and repair of the
Building or the Building Site
(other than landscaping or
grounds-keeping charges) which Landlord determines are
desirable for the operation and maintenance of the Building or the
Building Site in accordance with the standard maintained in the
Euclid, Ohio area for similar buildings and building sites.
Tenant shall also reimburse landlord for property taxes and
insurance premiums, if paid for by the landlord, when due.
The foregoing additional charges and Operating Expenses shall be
paid by Tenant to Landlord within thirty (30) days of the date that
Landlord submits an invoice for such charges to Tenant (or, the due
date of such item if earlier).
SECTION 6 ‑ CONSTRUCTION OF TENANT IMPROVEMENTS .
(a) Delivery of Premises . Possession of the Premises shall be delivered to Tenant on the Commencement Date.
(b) Condition of Building . On the Commencement Date, Tenant will accept delivery of the Premises, together with any building(s), fixtures, equipment, and improvements thereon, in their present condition “AS IS, WHERE IS”, subject to all faults and patent and latent defects. Tenant represents and warrants that it has not relied upon any representations or warranties as to the state or condition of the Building made by Landlord, any persons comprising Landlord, or any representatives, employees, former employees, or agents of Landlord. Tenant does not require Landlord to make any improvements, repairs or replacements to the Premises, other than those agreed upon in writing and listed in Exhibit A3. Landlord makes no warranty whatsoever as to condition, state of repair, fitness, fitness for a particular purpose or otherwise with regard to the Building or the fixtures, equipment, or improvements to be located thereon.
‑ USE OF
PREMISES BY TENANT . Tenant shall use the Premises solely
for the purposes specified in subsection 1(b)(vi) hereof, and shall
not engage in any business or permit any use of the Premises which
is forbidden by law, ordinance, or government regulation,
which may increase the premium cost of or invalidate any policy of
insurance carried on the Premises or covering its operation.
In the event that Tenant’s use of the Premises increases the
premium cost of insurance carried on the Building or the Building
Site, Tenant shall pay any such increase. Tenant agrees
that the Premises shall be used and occupied subject to, and in
accordance with, all laws, rules, regulations, ordinances,
restrictions, and any certificate of occupancy. Tenant shall
not use or occupy, nor permit or suffer, the Premises or any part
thereof to be used or occupied for any unlawful or illegal
business, use or purpose, nor for any disreputable business, use or
purpose, nor in such manner as to constitute a nuisance of any
kind. Tenant shall immediately upon the discovery of any such
unlawful, illegal, or disreputable use take all necessary steps,
legal and equitable to compel the discontinuance of such use and to
oust and remove any subtenants, occupants, or other persons guilty
of such unlawful, illegal, or disreputable use. Tenant shall
not (either with or without negligence) cause or permit the escape,
disposal, or release of any hazardous substances or materials in
TAXES. Landlord shall be responsible for payment
of all real property taxes and assessments levied or assessed
against the Building or the Building Site .
SECTION 9 ‑ IMPROVEMENTS .
Prior Consent Required . Tenant shall not make or
permit to be made any significant alterations or improvements to
the Premises outside without Landlord’s prior written
consent. Any alterations or improvements
which may be
permitted by Landlord shall be upon the condition that Tenant
shall promptly pay all costs, expenses, and charges thereof, shall
make such alterations or improvements in accordance with applicable
laws and building codes and in a good and workmanlike manner, and
shall fully and completely indemnify Landlord against any
mechanic’s lien or other liens or claims in connection with
the making of such alterations and improvements. Tenant shall
promptly repair any damage to the Building or to the Building Site
caused by any alterations or improvements made by
(b) Removal of Improvements . Except as otherwise provided herein, all alterations and improvements by Tenant shall become the property of Landlord and shall not be removed from the Premises. All trade fixtures, furniture, and furnishings installed in the Premises by Tenant and paid for by Tenant shall remain the property of Tenant and may be removed upon the expiration of the term of this Lease; provided (i) that any of such items as are affixed to the Premises and require severance may be removed only if Tenant repairs any damage caused by such removal and (ii) that Tenant shall have fully performed all of the covenants and agreements to be performed by Tenant under the provisions of this Lease. If Tenant fails to remove such items from the Premises prior to the expiration or earlier termination of this Lease, all such trade fixtures, furniture, and furnishings shall become the property of the Landlord unless Landlord elects to require their removal, in which case Tenant shall promptly remove such trade fixtures, furniture, and furnishings and restore the Building to its prior condition. To the extent that any additions or improvements by Tenant include the installation of wires and/or lines for telecommunication or computers, such wires shall be clipped and tagged for identification purpose when installed and, upon the expiration of this Lease, Landlord shall have the right to require Tenant’s removal thereof in accordance with the provisions of this subsection 9(b).
SECTION 10 ‑ REPAIRS BY LANDLORD . In the event that Tenant shall not maintain the Premises as required by this Lease, Landlord shall have the right, but not the obligation, to perform, or cause to be performed, any repairs that the Landlord shall deem necessary with respect to the Premises and all costs incurred by Landlord shall be paid by Tenant within thirty (30) days of receipt by Tenant of Landlord’s invoice therefore. Any amounts expended by Landlord pursuant to this Section 10 shall be deemed Operating Expenses payable by Tenant and shall constitute Additional Rent payable hereunder. Landlord agrees to provide written notice 15 days prior to performing any such maintenance with an estimate of repair costs, and shall give the tenant reasonable time, not to exceed 30 days, to perform said maintenance or repairs.
REPAIRS AND MAINTENANCE OF THE PREMISES BY TENANT .
Tenant shall keep the Premises and every part thereof and any
fixtures, facilities, or equipment contained therein, including,
without limitation, the electrical, water, water heating,
wastewater, and heating, ventilating, overhead pipe systems and air
conditioning systems serving the Building or the Building Site in
good condition and repair, and shall make any replacements
thereof. Tenant shall also repair or replace all structural
elements of the Building, including, without limitation, the
foundations, exterior walls, roof, doors and windows and shall
replace any broken and cracked glass on windows and doors situated
in the Building. Tenant shall not permit any waste, damage,
or injury to the Premises. Tenant shall be responsible for
all maintenance related to the Premises, other than as provided
below, and shall contract for and obtain all necessary service,
including, without limitation, janitorial and waste removal
services, necessary to maintain the Premises in a safe, healthy and
Notwithstanding the foregoing, Landlord
shall be responsible for maintaining all landscaping and
grounds-keeping for the Premises .
(a) Commercial Liability Insurance . Tenant agrees to carry commercial general liability insurance covering the Premises and Tenant’s use thereof in companies and in a form satisfactory to Landlord, with a minimum combined single limit of [One Million Dollars ($1,000,000.00)] for liability on account of bodily injury and property damage. Tenant shall deposit such policy or policies (or certificates thereof) with Landlord prior to the Commencement Date. Such policy or policies shall name Landlord and Tenant as additional insureds and shall bear endorsements to the effect the insurer agrees to notify Landlord not less than ten (10) days in advance of any modification or cancellation thereof.
(b) Landlord’s Liability . Landlord shall not be liable: (i) for any damage to Tenant’s property located in the Premises, regardless of the cause of such damage, or (ii) for any acts or omissions of other tenants of the Building, if any, or (iii) for any condition of the Premises whatsoever unless Landlord is responsible for the repair thereof and has failed to make such repair after notice from Tenant of the need therefor and the expiration of a reasonable time for the making of such repair.
Fire and Extended Coverage Insurance . Tenant agrees
to carry, or pay the premiums for if the policy is in the landlords
name, policies insuring the Building and all permanent improvements
within the Building Site against fire and such other perils as are
normally covered by a “special form” (formerly known as
“all‑risk”) policy of property insurance, in a
mutually agreed upon amount not to exceed eighty percent (80%) of
the value thereof, together with insurance against such other risks
and in such amounts as Landlord deems appropriate. Tenant
agrees to carry insurance against fire and such other risks as are
normally covered by a “special form” (formerly known as
“all‑risk”) policy of property insurance for
tenant’s personal property for at least $500,000.
an amount equal to at least one hundred percent (80%) of the
replacement cost of Tenant’s trade fixtures, furniture,
furnishings, special equipment, and all other items of personal
property of Tenant located on or within the Premises.
Upon written request, each party shall furnish the other with a
certificate evidencing such coverage.
(d) Mutual Waiver of Subrogation . Landlord and Tenant each agree to cause to be included in their respective policies of insurance the agreement of the issuer thereof that such policies shall not be invalidated by a waiver of claims by the insured against the Landlord or Tenant, as the case may be, and each will furnish evidence thereof to the other. In addition, but not in limitation of any other waiver herein, Landlord and Tenant each hereby waive any claim against the other for any loss resulting from any cause, including the negligence of the other, to the extent of the insurance proceeds available therefor.
(e) Compliance with Regulations . Tenant agrees to comply with all applicable rules, regulations, and requirements of any federal, state, county, or municipal authority, and the rules, regulations, and requirements of fire rating organizations and underwriters. Tenant, at Tenant’s cost and expense, shall make all replacements, alterations, and any and all repairs to the Premises required to comply with such rules, regulations, and requirements.
‑ EMINENT DOMAIN . If at any time during the term of
this Lease the Building or any material portion of the Building
Site is taken, in whole or in part, for public or
quasi‑public use or is condemned under eminent domain or
conveyed under threat of such a taking or condemnation, either
party may terminate this Lease effective on the date of such taking
or conveyance, and Tenant shall not be entitled to claim or have
paid to Tenant any compensation or damages whatsoever for or on
account of any loss, injury, damage, taking, or conveyance of any
right, interest, or estate of Tenant, and Tenant hereby
relinquishes and assigns to Landlord any rights to any such
damages. Landlord shall be entitled to claim and have paid to
it, for the use and benefit of Landlord, all compensation and
damages for and on account of or arising out of such taking,
condemnation, or conveyance, without deduction from the amount
thereof for or on account of any right, title, interest or estate
of Tenant in or to such property. Tenant, upon request of
Landlord, shall execute any and all releases, transfers, or other
documents as shall be required by such public or quasi‑public
authority to effect and give further evidence and assurance of the
SECTION 14 ‑ DEFAULT .
(a) Default . An event of default (“Event of Default”) under the terms and conditions of this Lease shall be deemed to have occurred if:
(i) Tenant fails to pay Base Rent, Additional Rent or charges, or any other sums due under this Lease or otherwise to Landlord, [and such failure continues for ten (10) days after written notice from Landlord];
(ii) Tenant fails to maintain insurance as required by this Lease, and such failure continues for a period of three (3) days after written notice from Landlord;
(iii) Tenant vacates the Building or permits waste to be committed or any unnecessary damage done upon or to the Premises, and such condition continues for a period of thirty (30) days after written notice from Landlord;
(iv) Tenant fails to perform or comply with any other condition or term of this Lease and such failure continues for a period of ten (10) days after written notice from Landlord;
(v) Tenant makes an assignment for the benefit of creditors or Tenant is subjected to receivership;
(vi) A petition in bankruptcy is filed by or against Tenant, or Tenant is declared insolvent in any way; or
(vii) The Premises or Tenant’s assets or property therein are levied upon or attached under process against Tenant, which is not satisfied or dissolved within ten (10) days after such levy.
(b) Landlord’s Remedies . Upon the occurrence of an Event of Default hereunder, Landlord may pursue any of the following remedies:
(i) Landlord may declare the term of the Lease ended and re‑enter and take possession of the Premises. Tenant shall be notified of such election by Landlord by delivery of written notice to vacate, stating that the Lease has been terminated and specifying the date of termination, which shall not be less than three (3) days from the date of such notice. In the event of such termination, Tenant shall peacefully surrender the Premises to Landlord on the date set forth in the notice. Thereafter, Landlord may re‑enter the Premises without further notice and repossess it by summary proceedings or otherwise, and may have, hold, and enjoy the Premises and the right to receive all rental income therefrom, free and clear of any claim on the part of Tenant.
(ii) Without terminating this Lease and without notice, except as is required by law, Landlord may re‑enter the Premises by summary proceedings or otherwise and dispossess Tenant. No re‑entry or taking of possession of the Premises by Landlord shall be construed as an election on Landlord’s part to terminate this Lease unless a written notice of such intention is given to Tenant or unless the termination of this Lease is decreed by a court of competent jurisdiction. In the event of such re‑entry, Landlord may, without being obligated to do so, in its own name but as agent for Tenant, relet the whole or any portion of the Premises, or the whole or any portion thereof with additional space, for any period equal to, greater, or less than the remainder of the original term of this Lease, for any sum (including any rental concessions and rent‑free occupancy) which it may deem reasonable, to any tenant which it may deem suitable and satisfactory, and for any use and purpose which it may deem appropriate. In the event of any reletting, Landlord shall apply the rent therefrom first to the payment of Landlord’s expenses, including attorney’s fees incurred by reason of Tenant’s default, commissions, and the repairs, renovation, or alteration of the Premises, and then to the payment of rent and all other items due from Tenant hereunder, Tenant remaining liable for any deficiency.
(iii) Any obligation imposed by law upon Landlord to relet the Premises shall be subject to the normal standards and requirements of Landlord for acceptance of any tenant. The failure of Landlord to relet, or if relet, to collect the rent under such reletting, shall not release or affect Tenant’s liability for damages hereunder.
(iv) Should any rent collected by Landlord as provided in this Section 14 be insufficient to fully pay to Landlord a sum equal to all rent reserved herein and other charges payable hereunder for the remainder of the term herein originally demised, Tenant shall be and remain liable for any such deficiency, and the right of Landlord to recover from Tenant the amount thereof, or a sum equal to all such rent and other charges payable hereunder, shall survive the issuance of any dispossessor warrant or other cancellation or termination hereof, and Landlord shall be entitled to retain any surplus. Landlord shall have the right, in place and instead of holding Tenant so liable, forthwith to recover against Tenant as damages for loss of the bargain and not as a penalty, in addition to any other damages becoming due, an aggregate sum which, at the time of the termination of this Lease or of the recovery of possession of the Premises by Landlord, as the case may be, represents the then present worth of the excess, if any, of the aggregate of the rent and all the charges payable by Tenant hereunder that would have accrued for the balance of the term over the aggregate rental value of the Premises (such rental value to be computed on the basis of a tenant paying not only rent to Landlord for the use and occupation of the Premises, but also such Additional Rent and other charges as are required to be paid by Tenant under the terms of this Lease) for the balance of such term.
(v) In the event of a default or threatened default by Tenant of any of the terms, provisions, covenants, conditions, and Rules and Regulations of this Lease, Landlord shall have the right to injunction and the right to invoke any remedy permitted to Landlord in law or in equity. All remedies available to Landlord are declared to be cumulative and concurrent. No termination of this Lease nor any taking or recovering of possession of the Premises shall deprive Landlord of any of its remedies or actions against Tenant.
(vi) Without limiting the generality of the foregoing, in determining Landlord’s loss, Landlord may accelerate all base rent and additional rent due for the balance of the term of this Lease, discounted at the rate of 8 percent (8%) per annum, and declare the same immediately due and payable. In determining the amount of any additional rent payments for purposes of this computation, Landlord may make such determination based upon the amount of the additional rent payable by Tenant for the twelve (12) month period immediately preceding Tenant’s default and assume that the same increases at the rate of 3 percent (3%) per annum.
SECTION 15 ‑ ASSIGNMENT AND SUBLETTING .
(a) Prior Approval Required for Assignment . This Lease shall not be assigned, mortgaged, pledged, encumbered, or in any other manner transferred by the Tenant, voluntarily or involuntarily, by operation of law or otherwise, without the prior written consent of Landlord.
(b) Permitted Subletting . The Premises, or any portion thereof, may be subleased by Tenant to any third party without the prior approval of Landlord, subject to the following: (i) the provisions of Section 15(c) shall be applicable to any sublease; (ii) any subtenant shall comply with all of the terms and conditions of this Lease, including the Permitted Use specified in Section1(b)(iv) hereof; (iii) a subtenant’s occupancy of the Premises shall be in compliance with all applicable laws. Any other subletting of the Premises shall require the prior written consent of Landlord.
(c) Consent not a Release . If Tenant shall at any time during the term of this Lease sublet all or any part of the Premises or assign or transfer this Lease, either with or without the consent of Landlord, Tenant shall nevertheless remain fully liable under all of the terms, covenants, and conditions of this Lease. If this Lease is assigned, or if the Premises or any part thereof are subleased, used, or occupied by anybody other than Tenant, Landlord may collect from the assignee, sublessee, or occupant any rent or other charges payable by Tenant under this Lease and apply the amount collected to the rent and other amounts due from Tenant hereunder, but such collection by Landlord shall not be deemed an acceptance of the assignee, sublessee, or occupant as a tenant or a release of Tenant from the obligations of Tenant under this Lease.
SECTION 16 ‑ DAMAGE OR DESTRUCTION .
(a) Termination . If (i) the Building is damaged to the extent of more than twenty‑five percent (25%) of the cost of replacement thereof, (ii