Exhibit 10.8
LEASE AGREEMENT
THIS LEASE AGREEMENT
(“Lease”) is made this 1st day of December, 1986, by
and between Indian Creek Company, a Virginia general partnership
(“Landlord”), and Boat America Corporation, a Virginia
corporation (“Tenant”).
WHEREAS, Landlord is the owner of
certain real property and improvements located at Long Meadow and
Porter Chemical Road, Hagerstown, Maryland, such improvements
presently consisting of warehouse and office space containing
approximately 287,300 square feet, more particularly described in
Exhibit A attached hereto (“Premises”); and
WHEREAS, Landlord desires to lease
the Premises to Tenant, and Tenant desires to lease the premises
from Landlord, upon the terms, conditions, covenants, and
agreements set forth herein;
NOW, THEREFORE, Landlord and Tenant,
do hereby covenant and agree as follows:
I. Premises, Term and
Surrender
A. Premises . Landlord hereby
leases the Premises to Tenant, for the “Term” and upon
the conditions, covenants and agreements hereinafter
provided.
B. Term . The term of this
Lease shall be for a period commencing on even date herewith and
expiring at midnight on November 30, 1996, (the
“Term”), unless sooner terminated in accordance with
the provisions hereof. At the option of the Tenant, the Lease may
be renewed for two (2) additional five-year periods.
C. Surrender . Tenant shall,
upon expiration of the Term hereof, quit and surrender the Premises
to Landlord in good order and condition, reasonable wear and tear
excepted. In the event that Tenant is prevented from quitting and
surrendering the Premises upon the expiration of the Term due to
any cause beyond the control of Tenant, then Tenant shall be
allowed to remain at and in the Premises as a month-to-month
Tenant, upon the same terms, conditions, covenants and agreements
as are set forth herein and at a monthly rent derived by dividing
the annual rent set forth in paragraph II-A by twelve (12), until
such time as Tenant shall be able to quit and surrender the
Premises to Landlord.
II. Rent, Impositions and
Liens .
A. Rent . Tenant covenants
and agrees to pay to Landlord rent in the following amounts
(“Base Rent”);
(1) Upon commencement of this Lease,
and continuing on the first day of each subsequent month during the
Term of this Lease, Tenant shall pay to Landlord, in advance, rent
in the amount of $46,000 per month.
(2) If the first and last month
during the Term of this Lease is less than a full calendar month,
the rent due in such month(s) shall be proportionately reduced
by
multiplying the rent that would otherwise be due
for the full month by a fraction, the numerator of which is the
number of days in the month during the Term, and the denominator of
which is the number of days in such month.
(3) All rent shall be paid to
Landlord at the Premises, unless Landlord gives Tenant notice of a
different address in accordance with paragraph XIII-C
below.
B. Rental Adjustments . On
the first day of the sixty-first (61st) month after the
commencement of this Lease, and at the beginning of each renewal
option period, the then Base Rent shall be adjusted upwards by the
increase, if any, in the U.S. Consumer Price Index, or in any
interest adjustment by First National Bank of Maryland
(“Bank”), whichever is greater, by multiplying the Base
Rent then due each month by a fraction, the numerator of which
shall be the Consumer Price Index or Bank interest rate, as of the
most recent date prior to such adjustment, and the denominator of
which shall be the Consumer Price Index as of the commencement date
of this Lease.
C. Liens . Tenant shall pay
all workmen and materialmen providing services or materials to the
Premises at the request of Tenant and shall not allow any
mechanic’s or materialmen’s lien to attach to or become
a lien against the Premises. If any such lien attaches to or
becomes a lien against the Premises, Tenant agrees to discharge
such lien within ten (10) days after written notice thereof from
Landlord to Tenant or to provide a satisfactory bond against any
such lien.
D. Impositions .
(1) Tenant covenants and agrees to
pay all lawful real estate taxes, assessments, general or special,
sewer and water charges and any other governmental charges, levied,
imposed or which become a lien against the Premises allocable to
the Term of this Lease (all or any of which are hereinafter
referred to as the “Imposition” or
“Impositions”).
(2) If any Imposition may, at the
election of Tenant, be paid in installments (whether or note
interest shall be imposed as a condition of payment in
installments), Landlord hereby authorizes and permits Tenant to pay
such Imposition in such installments as Tenant and the imposing
authority may agree upon.
(3) If any such Imposition payable
by Landlord prior to the commencement of this Lease or after
termination of this Lease covers a period during he Term of this
Lease, or if any such Imposition payable by Tenant covers a period
prior to the commencement of this Lease or subsequent to the
termination of this Lease, such Imposition (including interest
thereon, if any) shall be prorated between Landlord and Tenant as
of the date of commencement or termination of this Lease, as the
case may be, and paid to the appropriate party at such
time.
(4) Tenant shall have the right to
protest and/or contest any Imposition which is required to be paid
by Tenant hereunder by appropriate administrative or legal
proceedings, provided, however:
(i) Such protest or contest shall
not cause or result in a sale or foreclosure of the Premises which
cannot be terminated by payment of said protested or contested
Imposition;
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(ii) Tenant shall diligently
prosecute such protest and/or contest; and
(iii) Tenant shall be responsible
for the payment of any penalties, interest or fees with respect to
the Imposition protested or contested.
E. Right of Landlord . If
Tenant shall fail to pay any liens in accordance with paragraph
II-C; or fail to discharge or bond any lien, or, if Tenant shall
fail to pay any Imposition in accordance with paragraph II-D,
Landlord shall have the right, after prior written notice thereof
to Tenant, to pay or discharge such lien or Imposition on behalf of
Tenant. Any amount so paid by Landlord on behalf of Tenant shall be
deemed additional rent hereunder and shall be paid by Tenant within
ten (10) days of written demand thereof by Landlord.
III. Use, Maintenance and
Alterations .
A. Use .
(1) Tenant shall have the exclusive
right to use and occupy the Premises for its business operations,
together with activities related thereto including any storage of
Tenant’s line of products.
(2) Tenant agrees to comply with all
lawful governmental requirements in connection with the use and
occupancy of the Premises. It is expressly understood that if any
present or future law, ordinance, regulation or order requires an
occupancy permit for the Premises, Tenant will obtain such permit
at Tenant’s own expense.
B. Repairs . Tenant agrees to
maintain the Premises in good condition and repair, reasonable wear
and tear excepted, at its sole cost and expense.
C. Alterations . Tenant will
not make or permit anyone to make any material alterations,
additions or improvements, structural or otherwise, in or to the
Premises without the prior written consent of Landlord.
IV. Assignment and Subletting
. Tenant shall have the right, with the prior written approval of
Landlord, not to be unreasonably withheld, to assign this Lease
and/or to sublet all or any portion or portions of the Premises at
any time, Tenant to remain obligated for the rent in the event of
any default by the assignee or subtenant.
V. Insurance . Tenant shall
obtain and maintain insurance in accordance with the requirements
set forth in Exhibit B attached hereto and made a part
hereof.
VI. Default .
A. Default . Tenant shall be
in default hereunder if Tenant shall fail to timely pay rent
hereunder or comply with any of Tenant’s obligations
hereunder where such failure to comply shall continue for a period
of ten (10) days after the due date or required date of
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performance; provided, however, that Tenant
shall not be deemed in default if any such default may be
reasonably cured within thirty (30) days and Tenant is diligently
proceeding with the curing of such default.
B. Remedies . In the event
that Tenant is in default, Landlord, upon ten (10) days prior
written notice to Tenant, may terminate this Lease and reenter the
Premises. In addition, Landlord shall have the right to pursue any
claim or action against Tenant for damages or equitable relief,
and/or the right to cure such default on behalf of tenant (which
shall not constitute a waiver of such default) and charge Tenant
the cost of effecting such cure
