Exhibit 10.22
LEASE AGREEMENT
THIS LEASE AGREEMENT (this “
Lease ”) dated as of October 3, 2002 is made by and
between PURSELL HOLDINGS, LLC, an Alabama limited liability
company, having its principal office at Post Office Box 1187,
Sylacauga, Alabama 35150, as lessor (the “ Lessor
”, and SYLORR PLANT CORP., a Delaware corporation, having its
principal place of business at 8825 Page Boulevard, St. Louis,
Missouri 63114, as lessee (the “ Lessee
”).
W I T N E S S E T
H:
WHEREAS , Lessor and Lessee desire to enter into this
Lease in connection with the consummation of the transactions
specified in the Asset Purchase Agreement.
NOW, THEREFORE
, in consideration of the foregoing,
and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
For purposes of this Lease,
capitalized terms used in this Lease and not otherwise defined
herein shall have the meanings assigned to them in Appendix
A attached hereto and incorporated herein by this reference.
Unless otherwise indicated, references in this Lease to articles,
sections, paragraphs, clauses, appendices, schedules and exhibits
are to the same contained in this Lease.
The rules of usage set forth in
Appendix A shall apply to this Lease.
ARTICLE II
Subject to the terms and conditions
hereinafter set forth, Lessor hereby leases onto Lessee, and Lessee
hereby leases from Lessor, the premises consisting of the real
property as legally described in Exhibit “A” (attached
hereto and incorporated herein), certain Equipment as described in
Exhibit “B” (attached hereto and incorporated herein),
and all improvements located thereon (together with all easements,
rights and privileges appurtenant thereto) (the “ Demised
Premises ”).
(a) The term of this Lease (the
“ Term ” shall begin on the closing date (the
“ Closing ”) of the Asset Purchase Agreement
(the “ Commencement Date ”) ( provided ,
however , that in the event the closing date under the Asset
Purchase Agreement occurs after December 31, 2002 this Lease shall
terminate and Lessor and Lessee shall be fully released from all
obligations and liabilities hereunder), and shall end on the date
four (4)
years after the Commencement Date,
unless the Term is earlier terminated by Lessee as provided herein.
Lessee shall have the right to terminate this Lease, for no reason
or any reason, in its sole discretion, at any time after the date
two years after the Commencement Date (including during any
extension period) by providing written notice to Lessor of its
intention to terminate the Lease not less than one hundred eighty
(180) days prior to such termination date.
(b) If Lessee is not then in default
hereunder and the Supply Agreement continues in full force and
effect, Lessee shall have the option to extend the Term of this
Lease for two (2) extension periods of two (2) years each, with
Fixed Rent set and adjusted by the CPI Adjustment Method, by
providing written notice of its election to exercise its option not
less than ninety (90) days prior to expiration of the original Term
or renewal Term, as applicable. For the sake of clarity, the Fixed
Rent shall be adjusted by the CPI only once during each extension
of the Lease.
(c) The obligations of the parties
under this Lease are contingent upon the delivery to Lessor from
(i) Pursell Industries, Inc. (“ Pursell ”) of a
Lease Termination Agreement in form and substance reasonably
acceptable to Lessor and Lessee which provides, inter
alia , that Pursell’s possession of the Demised
Premises shall terminate upon the Closing, and (ii) Lessee’s
counsel an opinion letter in counsel’s standard form as to
organization, corporate power, authorization, execution and
delivery, in form and substance reasonably acceptable to Lessor and
Lessee, to be delivered by Lessee at the closing of the
transactions contemplated by the Asset Purchase Agreement, in no
event later than October 15, 2002.
ARTICLE III
(a) Lessee shall pay to Lessor
during the term of this Lease and during any extension periods or
renewals, an annual fixed rent (“ Fixed Rent ”)
of $600,000.00, payable in equal monthly installments of $50,000.00
each, in advance on the first day of the first calendar month
during the Term and continuing throughout the balance of the Term,
provided , however , that if the Commencement Date is
not the first (1 st ) day of a calendar month, then on
or before the Commencement Date, Lessee shall pay to Lessor as rent
for the partial month a pro rata part of such monthly installment
of rent.
(b) All payments of Fixed Rent
(unless otherwise specified in this Lease as to certain payments of
Supplemental Rent) shall be made to Lessor at Lessor’s
address set forth in Article XXIII, or to such other place as
Lessor may specify from time to time by written notice delivered to
Lessee in accordance with Article XXIII at least thirty (30) days
in advance.
(c) Lessee shall make all payments
of Rent prior to 12:00 Noon, Birmingham, Alabama time, on the
applicable date for payment of such amount.
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Lessee shall pay to the Person
entitled thereto any and all Supplemental Rent when and as the same
shall become due and payable, and if Lessee fails to pay any
Supplemental Rent within ten (10) Business Days after notice that
the same is due, Lessor shall have all rights, powers and remedies
provided for herein in the case of nonpayment of Fixed Rent. In the
event Supplemental Rent is due to Lessor, Lessor shall give Lessee
written notice of the amount of Supplemental Rent due and shall
state in the notice the due date for the same. Lessee shall pay to
the appropriate Person, as Supplemental Rent due and owing to such
Person, (a) any and all payment obligations (except for amounts
payable as Fixed Rent) owing from time to time hereunder and (b)
interest at the applicable Overdue Rate on any installment of Fixed
Rent not paid when due for the period for which the same shall be
overdue and on any payment of Supplemental Rent not paid when due
or demanded by the appropriate Person for the period from the due
date or the date of any such demand, as the case may be, until the
same shall be paid. The expiration or other termination of
Lessee’s obligations to pay Fixed Rent hereunder shall not
limit or modify the obligations of Lessee with respect to
Supplemental Rent incurred prior to the date of termination or
expiration or due as a result of the occurrence of an Event of
Default. Unless expressly provided otherwise in this Lease, in the
event of any failure on the part of Lessee to pay and discharge any
Supplemental Rent as and when due, Lessee shall also promptly pay
and discharge any fine, penalty, interest or cost which may be
assessed or added for nonpayment or late payment of such
Supplemental Rent, all of which shall also constitute Supplemental
Rent.
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3.3
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Performance on a Non-Business Day
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If any Fixed Rent or Supplemental
Rent is due hereunder on a day that is not a Business Day, then
such Fixed Rent or Supplemental Rent shall be due on the next
succeeding Business Day.
ARTICLE IV
(a) Lessee shall pay, as
Supplemental Rent, directly to the appropriate tax authority all
Taxes which become due and payable during the Term as set forth in
this Section. For the purposes of this Lease, the term
“Taxes” shall mean all real estates taxes and general
assessments imposed upon the Demised Premises or any portion
thereof during the Term. If any Taxes are payable in installments
(regardless of whether or not interest accrues on the unpaid
balance of such Taxes), Lessee shall have the right to pay such
Taxes in installments and shall only be obligated to pay such
installments which are due and payable during the Term when they
become due and payable.
(b) Notwithstanding the foregoing,
any such Taxes shall be pro-rated at the commencement and the
expiration of the Term to take into account the time during which
Lessee was not leasing the Demised Premises. If any parcel of real
property included within the Demised Premises does not have a tax
parcel identification number (“ PIN’ ) as of the
Commencement Date or if the Demised Premises includes any portion
of any
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parcel of real property with a
separate PIN, then Lessor shall use its best efforts to cause the
PINs relating to the relevant parcels to be amended or new PINs to
be created as soon as practicably possible so that the Demised
Premises is covered by one or more separate PINs which do not
include any additional real property.
(c) Lessor agrees to deliver to
Lessee all original bills for Taxes promptly upon receipt by
Lessor, and Lessee shall pay such Taxes when the same are due and
payable to the taxing authority; provided , however ,
that Lessee shall not be required to pay interest or penalties
resulting from Lessor’s late delivery of such tax bills to
Lessee.
(d) Lessee shall have the right to
contest the amount or validity, in whole or in part, of any Taxes
by appropriate proceedings diligently conducted in good faith,
after paying the Taxes or funding reserves, in accordance with
generally accepted accounting principles then in effect
(“GAAP”), in an amount equal to such Taxes. Upon the
termination of those proceedings, Lessee shall pay the amount of
Taxes finally determined to be due and owing together with any
costs, fees, interest, penalties or other related liabilities.
Lessor shall not be required to join in any contest or proceedings
unless the provisions of any Laws (as defined herein) then in
effect require that the proceedings be brought by or in the name of
Lessor. In that event, Lessor shall join in the proceedings or
permit them to be brought in its name. Within a reasonable time
after demand therefor, Lessor shall execute and deliver to Tenant
any documents which are required to enable Lessee to prosecute any
such proceeding. Lessor’s failure, within a reasonable period
of time, to execute and deliver to Lessee any such documents, or to
take any other action or to supply any information (to the extent
available) requested by the Lessee in writing and required in order
to enable Lessee to prosecute any such proceeding shall relieve
Lessee from its obligation to pay any increase in real estate taxes
in respect of the tax period in question as compared to the real
estate taxes for the prior tax period. If Lessee obtains a
reduction or abatement of Taxes, Lessee shall be entitled to
receive all reduction or abatement proceeds (after reimbursement of
any costs and expenses incurred by Lessor, or to which Lessor is
subject under this Section) relating to the tax years occurring
during the Term of this Lease.
Lessee shall pay, as Supplemental
Rent, for all utility services supplied to the Demised Premises and
used or consumed by Lessee (the “ Utilities ”),
including, without limitation, all water, gas, electricity, light,
heat and telephone. Lessor shall use its best efforts to cause such
Utilities to be billed directly to Lessee prior to the Commencement
Date. Lessor agrees to deliver to Lessee any original bills for
Utilities by Lessor promptly following such receipt.
ARTICLE V
Subject to the rights of Lessor
contained in Sections 15.1, 15.2 and 15.3 of this Lease, Lessor
warrants that Lessee shall peaceably and quietly have, hold and
enjoy the Demised Premises for the applicable Term, free of any
claim or other action by Lessor or anyone
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rightfully claiming by, through or under Lessor
(other than Lessee). Lessor will warrant and defend Lessee in
peaceful and quiet enjoyment of the Demised Premises against the
claims of all such persons claiming by, through or under Lessor
(other than Lessee).
ARTICLE VI
Lessee acknowledges and agrees that
it is intended that this Lease provide net rental income to Lessor,
clear of all Taxes and Utilities, and that Lessor will not be
responsible during the Term for any Taxes and Utilities. Fixed Rent
shall be paid absolutely net to Lessor or its designee of Taxes and
Utilities, so that this Lease shall yield to Lessor the full amount
thereof, without set off, deduction or reduction. Lessee shall pay
all operating expenses arising out of the use, operation and/or
occupancy of the Demised Premises by Lessee.
ARTICLE VII
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7.1
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Condition
of the Demised Premises .
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(a) Lessor and Lessee agree that the
parties shall conduct a walk-through of the Demised Premises prior
to the Commencement Date for the purpose of inspecting and
determining the condition of the Demised Premises and the Equipment
(the “ WalkThrough ”). Lessee and Lessor shall,
no later than three (3) business days after the WalkThrough, agree
upon a written inspection list describing the condition of the
Demised Premises as it existed on the day of the Walk-Through (the
“ Inspection List ”).
(b) Upon the Commencement Date,
Lessee acknowledges that it is leasing the Demised Premises
“AS-IS WHERE-IS” AND WITH ALL FAULTS, WITHOUT
REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR IMPLIED) AS TO THE
PHYSICAL CONDITION OF THE DEMISED PREMISES AND
EQUIPMENT.
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7.2
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Possession and Use of the
Properties .
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(a) At all times during the Term,
the Demised Premises shall be used by Lessee in the ordinary course
of its business as a Permitted Facility. Lessee shall not commit or
permit any waste of the Demised Premises or any part
thereof.
(b) Lessee will not attach or
incorporate any item of Equipment to or in any other item of
equipment or personal property or to or in any real property in a
manner that could give rise to the assertion of any Lien on such
item of Equipment by reason of such attachment or the assertion of
a claim that such item of Equipment has become a fixture to other
than the Demised Premises and is subject to a Lien in favor of a
third party
(c) At all times during the Term,
Lessee will comply with all obligations under and (to the extent no
Event of Default exists and provided that such exercise will not
impair the value, utility or remaining useful life of the Demised
Premises) shall be
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permitted to exercise all rights and
remedies under, all operation and easement agreements and related
or similar agreements applicable to the Demised
Premises.
(d) Lessor acknowledges that Lessee
has disclosed to Lessor its intended use of the Demised Premises as
a manufacturing facility for lawn, garden and related products, and
that such use in accordance with the terms hereof shall not be
deemed an unpermitted use of the Demised Premises, under this
Lease.
(e) Lessee shall not use on the
Demised Premises the product commonly known as Atrazine without
Lessor’s prior written consent, which shall not be
unreasonably withheld, conditioned or delayed.
The parties acknowledge and agree
that certain personal property, equipment and rolling stock is
owned by Lessee (“ Lessee’s Property ”)
which is more particularly described on Exhibit
“C” , attached hereto and made a part hereof, and
that such Lessee’s Property shall not constitute Demised
Premises for purposes of this Lease.
ARTICLE VIII
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8.1
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Compliance With Laws
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(a) Lessor represents and warrants
to Lessee that, to Lessor’s knowledge, as of the Commencement
Date, and except as may have been previously disclosed in the
Initial Phase I Report, the Demised Premises and all improvements
and Equipment located thereon comply with all federal, state and
local laws (including all common laws) regulations, codes and
ordinances (“ Laws ”).
(b) Subject to Section 9.2 of the
Lease, Lessee, at its sole cost and expense, agrees to comply with
all Laws relating to the performance of its obligations hereunder
and its use and occupancy (or its employees, contractors, agents,
licensees, or invitees) of the Demised Premises during the Term.
Lessor agrees to comply with all Laws relating to the performance
of its obligations hereunder and any use by Lessor (or its
employees, contractors, agents, licensees, or invitees) of the
Demised Premises during the Term. Lessee agrees to permit Lessor
access to the Demised Premises to allow Lessor to comply with such
requirements.
ARTICLE IX
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9.1
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Maintenance and Repair; Return
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(a) Lessee, at its sole cost and
expense, shall maintain the Demised Premises in the same condition
and repair (ordinary wear and tear excepted) as when delivered to
Lessee on the Commencement Date as stated in the Inspection List,
whether interior or exterior, structural or nonstructural on a
basis consistent with the reasonable operation and maintenance of
the Demised Premises by Lessee in connection with the operation
of
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its business from the Demised
Premises, subject, however, to the provisions of Articles XIII and
XN with respect to Casualty and Condemnation.
(b) Lessee shall not use or locate
any component of the Equipment outside of the Approved State
therefor. Lessee shall not move or relocate any component of any
Equipment beyond the boundaries of the Demised Premises, except for
the temporary removal of Equipment and other personal property for
repair or replacement.
(c) If any component of the
Equipment becomes worn out, lost, destroyed, damaged beyond repair
or otherwise permanently rendered unfit for use, Lessee, at its own
reasonable expense and within a reasonable time, will replace such
component with a reasonable replacement component which is free and
clear of all Liens (other than Lessor Liens) and has a value,
utility and useful life at a reasonably equivalent value of the
component replaced (assuming the component replaced had been
maintained and repaired in accordance with the requirements of this
Lease, normal wear and tear excepted). All components which are
added to the Equipment shall immediately become the property of
(and title thereto shall vest in) Lessor, and shall be deemed
incorporated in such Equipment and subject to the terms of this
Lease as if originally leased hereunder. Notwithstanding anything
contained herein and in this Lease, Lessee may acquire and finance
new equipment and personal property and acquire, finance, or repair
any of Lessee’s Property from time to time for use at the
Demised Premises and the same shall not become the property of
Lessor. Nothing contained herein shall require Lessee to upgrade or
add to any of the Equipment unless Lessee elects to do so, in its
reasonable business discretion, and the condition of the Equipment
during the Term of this Lease is in all respects subject to normal
wear and tear and obsolescence. Additionally, Lessor acknowledges
and agrees that Lessee may use Lessee’s Demised Premises in
lieu of any Equipment during the Term of this Lease, and so long as
Lessee removes Lessee’s Demised Premises and replaces it with
the Equipment (normal wear and tear excepted) prior to the end of
the Term, such Lessee’s Demised Premises shall not be deemed
or become a part of the Equipment owned by Lessor.
(d) Upon reasonable prior written
notice delivered to Lessee in no event less than twenty-four (24)
hours in advance (except in case of an emergency), Lessor and its
agents shall have the right to inspect the Demised Premises at any
reasonable time during normal business hours but shall not, in the
absence of an Event of Default, materially disrupt the business of
Lessee. Lessor shall not unreasonably interfere with Lessee’s
business in connection with such entry which would result in any
unreasonable work stoppage by Lessee.
(e) Lessee shall, upon the
expiration or earlier termination of this Lease, surrender the
Demised Premises to Lessor in substantially the same condition as
existed on the Commencement Date and as stated in the Inspection
List (normal wear and tear and damage from casualty and
condemnation excepted). In the event Lessee fails to surrender the
Demised Premises as aforesaid, Lessor shall have the right to
exercise the applicable remedies upon the occurrence of an Event of
Default. Lessee shall have the right, so long as it is not in
default, upon the expiration of the term, to remove from the
Demised Premises all of Lessee’s Property, whether or not the
same be attached to the
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real estate, provided that Lessee
shall reasonably restore and repair any damage to the Demised
Premises caused by the removal of Lessee’s Property. The term
“ordinary wear and tear” as used herein shall not be
construed as permitting any material broken, damaged or missing
items or components of any item of Equipment. Upon redelivery,
Lessee shall provide any additional documentation reasonably
requested by Lessor relating to the redelivery of or Lessor’s
interest in each item of Equipment.
ARTICLE X
(a) At any time and from time to
time during the Term, Lessee may, at its sole cost and expense,
make modifications, alterations, renovations, Improvements and
additions to the Demised Premises or any part thereof and
substitutions and replacements therefor (collectively, “
Modifications ”), provided that: (i) no Modification
shall materially impair the value, utility or useful life of the
Demised Premises from that which existed at the Commencement Date;
(ii) each Modification shall be done in a good and workmanlike
manner; (iii) no Modification shall materially adversely affect the
structural integrity of the Demised Premises; (iv) to the extent
required by Article XII, Lessee shall maintain builders’ risk
insurance at all times when a Modification is in progress; (v)
Lessee shall pay all costs and expenses and discharge any Liens
arising with respect to any Modification; (vi) each Modification
shall comply with the requirements of this Lease; and (vii) no
Improvement shall be demolished or otherwise rendered materially
unfit for use as a result of any such Modification.
(b) All Modifications shall
immediately and without further action upon their incorporation
into the Property (1) become property of Lessor, (2) be subject to
this Lease and (3) be titled in the name of Lessor.
(c) Notwithstanding anything
contained herein and this Lease, Lessee shall have the right to
purchase and place on the Demised Premises, from time to time,
during the Term the following, which may include but is not limited
to, trade fixtures, business equipment, inventory and other
personal property that will be Lessee’s Property. Lessee will
have the right to finance the purchase of such Lessee’s
Property as determined by Lessee, and Lessor shall claim no right,
title or interest in and to the same and shall execute in favor of
Lessee’s lender a waiver of landlord’s or other lien or
claim with regard to such Lessee’s Demised Premises. In the
event any such Lessee’s Property is or becomes affixed to the
Demised Premises, Lessee shall have the right to remove the same at
the expiration or termination of this Lease and shall reasonably
restore and repair damage occasioned by such removal at
Lessee’s sole cost and expense and in a good and workmanlike
manner. In the event Lessee does not remove any of Lessee’s
Property from the Demised Premises at the expiration or termination
of this Lease, such Lessee’s Property shall be considered
abandoned (subject to any applicable laws regarding abandonment and
shall automatically become the property of Lessor or Lessor shall
have the right to remove the same at Lessee’s cost and
expense.
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ARTICLE XI
With respect to the Demised Premises
Lessor hereby represents and warrants to Lessee that: (a) Lessor
has good and marketable indefeasible fee simple title to the
Demised Premises; (b) there are no mortgages, deeds of trust,
liens, covenants, conditions, restrictions, easements or any other
liens or encumbrances (“ Liens ”) affecting the
Demised Premises except (i) Liens which do not and could not
unreasonably interfere with Lessee’s use or occupancy of the
Demised Premises and (ii) mortgages or deeds of trust in favor of
lenders that have delivered non-disturbance and attornment
agreements to Lessee in form and substance reasonably satisfactory
to Lessee and Lessor’s lender, (c) Lessor has not leased or
otherwise granted to any person the right to use or occupy the
Demised Premises or any portion thereof; and (d) there are no
outstanding options, rights of first offer or rights of first
refusal to lease the Demised Premises or any portion thereof or
interest therein.
ARTICLE XII
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12.1
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Public
Liability and Workers’ Compensation Insurance
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During the Term, Lessee shall
procure and carry, at Lessee’s sole cost and expense,
commercial general liability and umbrella liability insurance for
claims for injuries or death sustained by persons or damage to
property while on the Demised Premises or respecting the Equipment,
and such other public liability coverages as are then customarily
carried by similarly situated companies conducting business similar
to that conducted by Lessee. Such insurance shall be on terms and
in amounts that are no less favorable than insurance maintained by
Lessee with respect to similar properties and equipment that it
owns and are then carried by similarly situated companies
conducting business similar to that conducted by Lessee, and in no
event shall have a minimum combined single limit per occurrence
coverage (a) for commercial general liability of less than
$1,000,000.00 and (b) for umbrella liability of less than
$15,000,000.00. The policies shall name Lessee as the insured and
shall be endorsed to name Lessor as an additional insured. The
policies shall also specifically provide that such policies shall
be considered primary insurance which shall apply to any loss or
claim before any contribution by any insurance which Lessor may
have in force. In the operation of the Demised Premises, Lessee
shall comply with applicable workers’ compensation laws and
protect Lessor against any liability under such laws.
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12.2
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Permanent
Hazard and Other Insurance .
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During the Term, Lessee shall, at
Lessee’s sole cost and expenses, keep the Demised Premises
insured against all risk of physical loss or damage by fire and
other risks and shall maintain builders’ risk insurance
during construction of any Modifications, in each case in amounts
no less than the replacement cost of the Demised Premises from time
to time, and on terms that (i) are no less favorable than insurance
covering other similar properties owned by Lessee, and (ii) are
then carried by similarly situated companies conducting business
similar to that conducted by Lessee. The policies shall name Lessee
as the insured and shall be endorsed to name Lessor as a named
additional insured and loss payee, to the extent of its interests;
provided ,
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so long as no Event of Default exists, any loss
payable under the insurance policies required by this Section for
losses up to $100,000.00 will be paid to Lessee.
(a) Upon written request by Lessor,
the Lessee shall furnish Lessor with certificates prepared by the
insurers or insurance broker of Lessee showing the insurance by
Lessee to be in effect.
(b) All such insurance shall be
provided by nationally recognized, financially sound insurance
companies having an B+ or better rating by A.M. Best’s Key
Rating Guide.
(c) Lessee agrees that the insurance
policies required by this Article shall include an appropriate
clause pursuant to which any such policy shall provide that it will
not be invalidated should Lessee waive, at any time, any or all
rights of recovery against any party for losses covered by such
policy or due to any breach of warranty, fraud, action, inaction or
misrepresentation by Lessee or any person acting on behalf of
Lessee. Lessee hereby waives any and all such rights against Lessor
to the extent of payments made to any such person under any such
policy.
(d) Neither Lessor nor Lessee shall
carry separate insurance concurrent in kind or form or contributing
in the event of loss with any insurance required under this Article
XII, except that Lessor may carry separate liability insurance at
Lessor’s sole cost, so long as (i) Lessee’s insurance
is designated as primary and in no event excess or contributory to
any insurance Lessor may have in force which would apply to a loss
covered under Lessee’s policy and (ii) each such insurance
policy will not cause Lessee’s insurance required under this
Article to be subject to a coinsurance exception of any
kind.
(e) Lessee shall pay as they become
due all premiums for the insurance required by this Article, shall
renew or replace such policy of insurance prior to the expiration
date thereof, or otherwise maintain the coverage required by this
Article without any lapse in coverage.
(f) Lessor agrees that it shall not
have any right, title or interest in and to Lessee’s property
insurance covering Lessee’s Property located on or within the
Demised Premises or any proceeds therefrom.
(g) Lessor and Lessee and all
parties claiming under them, mutually release and discharge each
other from all claims and liabilities arising from or caused by any
casualty or hazard, covered or required hereunder to be covered in
whole or in part by insurance on the Demised Premises or in
connection with property on or activities conducted on the Demised
Premises, and waive any right of subrogation which might otherwise
exist in or accrue to any person on account thereof. This waiver
shall not be required if the insurance carrier charges an
additional premium in order to provide such waiver and the party
benefiting from the waiver does not agree to pay the additional
premium.
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ARTICLE XIII
In the event the Demised Premises is
hereafter materially damaged or destroyed or rendered fully or
partially untenantable for its accustomed use, by fire or other
casualty, which cannot be repaired within one hundred twenty (120)
days, then Lessee shall have the right to terminate this Lease
effective thirty (30) days after delivery of written notice to
Lessor. If Lessee does not elect to terminate this Lease, then
Lessor shall, at its cost and expense, restore, within a reasonable
period of time (not to exceed one hundred and twenty (120) days),
the Demised Premises to a substantially similar condition as
existed prior to such casualty. From the date of such casualty
until the Demised Premises is so repaired and restored, all Fixed
Rent and all other charges payable by Lessee hereunder shall abate
in such proportion as the part of the Demised Premises thus
destroyed or rendered untenantable bears to the total square
footage of the Demised Premises. Further, if it is at any time
anticipated that such casualty cannot be repaired within one
hundred and twenty (120) days, then Lessee shall have the right to
terminate this Lease, effective as of the date of the occurrence of
such casualty, by delivering written notice thereof to Lessor
within thirty (30) days of the time at which it becomes apparent
that such damage cannot be repaired with such time frame. Upon any
such notice by Lessee to terminate, this Lease shall terminate and
Fixed Rent and all other charges payable by Lessee hereunder shall
abate as aforesaid from the date of such casualty, and Lessor shall
promptly repay to Lessee any Fixed Rent paid in advance which has
not been earned as of the date of such casualty. From and after
such date, Lessee shall be fully released the obligations to pay
any Fixed Rent and Supplemental Rent hereunder.
ARTICLE XIV
If by exercise of the right of
condemnation or eminent domain or by conveyance made in response to
the threat of the exercise of such right (a “ Taking
”), so much of the Demised Premises is taken that the Taking
materially interferes with Lessee’s continued occupancy for
the uses and purposes for which the Demised Premises is leased,
then, this Lease shall terminate on the earlier of the vesting of
title to the Demised Premises or the taking of possession of the
Demised Premises by the Condemning Authority (the “ Ending
Date ”, in which case all Fixed Rent shall be prorated to
such Ending Date (on the basis of a 365 day calendar year), and the
obligations of the parties hereunder shall terminate.
If any part of the Demised Premises
shall be so taken and the remaining part of the Demised Premises is
reasonably suitable and does not materially interfere with
Lessee’s continued occupancy for the purposes and uses for
which the Demised Premises are leased, then:
(a) this Lease shall end on the
Ending Date as to the part of the Demised Premises which is taken
and all Fixed Rent and other obligations of Lessee shall cease with
respect to such part of the Demised Premises;
11
(b) beginning on the day after the
Ending Date, rent for so much of the Demised Premises as remains
shall be equitably adjusted and reduced relative to the Demised
Premises before the Taking; and
(c) Lessor shall, at its cost and
expense, restore, within a reasonable period of time, so much of
the Demised Premises as remains in order to permit Lessee’s
operation of the business in substantially the same manner as
Lessee conducted such business prior to such Taking.
(d) In connection with any Taking
under this Section, Lessor shall be entitled to all proceeds or
awards in connection with such Taking relating to its fee interest
and Lessee shall be entitled to all proceeds or awards relating to
its interest under this Lease, including any loss of Lessee’s
Property and moving expenses.
(e) Each party agrees to sign and
deliver to the other all instruments that may be required to
effectuate the provisions of this paragraph.
ARTICLE XV
If any one (1) or more of the
following events (each a “ Event of Default ”)
shall occur:
(a) Lessee shall fail to make
payment of any Fixed Rent within ten (10) Business Days after the
same has become due and payable;
(b) Lessee shall fail to make
payment of any Supplemental Rent which has become due and payable
within ten (10) Business Days after receipt of written notice from
Lessor that such payment is due;
(c) Lessee shall fail to make
payment of or fail to perform any term, covenant, obligation or
condition pursuant to that certain Supply and Trademark Agreement
between Lessor and United Industries Corporation dated as of
November 1, 2002 (the “Supply Agreement”) or the Supply
Agreement has not become effective on or before November 1,
2002.
(d) Lessee shall fail to observe or
perform any term, covenant, obligation or condition of Lessee under
this Lease, other than those set forth in Sections 15.1(a), (b) or
(c) hereof, and such failure shall continue for thirty (30) days
after receipt of written notice from Lessor to Lessee, provided if
any such failure other than those set forth in Sections 15.1(a),
(b) (c) hereof is not capable of remedy within such thirty (30) day
period but can be remedied with further diligence and if the Lessee
diligently proceeds to cure such default;
(e) The filing by Lessee of a
voluntary petition or an answer seeking reorganization,
arrangement, readjustment of its debts or for any other relief
under the United States Bankruptcy Code, as amended, or under any
other insolvency act or law, state or federal, now or hereafter
existing, or any other action of Lessee indicating its
12
consent to, approval of or
acquiescence in, any such petition or proceeding; the application
by Lessee for, or the appointment by consent or acquiescence of
Lessee of a receiver, a trustee or a custodian of Lessee for all or
a substantial part of its property; the making by Lessee of any
assignment for the benefit of creditors;
(f) The filing of an involuntary
petition against Lessee in bankruptcy or seeking reorganization,
arrangement, readjustment of its debts or for any other relief
under the United States Bankruptcy Code, as amended, or under any
other insolvency act or law, state or federal, now or hereafter
existing; or the involuntary appointment of a receiver, a trustee
or a custodian of Lessee for all or a substantial part of its
property; or the issuance of a warrant of attachment, execution or
similar process against any substantial part of the property of
Lessee, and the continuance of any of such events for ninety (90)
days undismissed or undischarged;
(g) Lessee shall abandon the Demised
Premises or cease operations at the Demised Premises for a period
of ninety (90) days; then, in any such event, Lessor may, in
addition to the other rights and remedies provided for in this
Article and in Article 18.1, terminate this Lease by giving Lessee
ten (10) days written notice of such termination, and this Lease
shall terminate, and all rights of Lessee under this Lease shall
cease. Lessee shall, to the fullest extent permitted by law, pay as
Supplemental Rent, all reasonable costs and expenses incurred by or
on behalf of Lessor, including without limitation reasonable fees
and expenses of counsel, as a result of any Event of Default
hereunder.
Notwithstanding an Event of Default,
this Lease shall continue in effect for so long as Lessor does not
terminate the Lease, and Lessor may enforce all of its rights and
remedies under this Lease, including the right to recover Rent as
it becomes due under this Lease. Acts of maintenance or
preservation, efforts to relet the Demised Premises, the
appointment of a receiver upon initiative of Lessor to protect the
Lessor’s interest under this Lease, or the termination of
possession by lessee shall not constitute a termination of this
Lease.
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15.2
|
Surrender
of Possession .
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If a Event of Default shall have
occurred and be continuing, and whether or not this Lease shall
have been terminated pursuant to Section 15.1, Lessee shall, upon
thirty (30) days written notice, surrender to Lessor possession of
the Demised Premises. Lessor may enter upon and repossess the
Demised Premises by such means as are available at law and in
equity, and may remove Lessee and all other Persons and any and all
personal property and Lessee’s equipment and personalty and
severable Modifications from the Demised Premises.
If an Event of Default shall have
occurred and be continuing, and whether or not this Lease shall
have been terminated pursuant to Section 15.1, Lessor may, but
shall be under no obligation to, relet any or all of the Demised
Premises, for the account of Lessee or otherwise, for such terms or
terms (which may be greater or less than the period which would
otherwise have constituted the balance of the Term) and on such
conditions (which may include
13
concessions or temporary free rent) and for such
purposes as Lessor may determine, and Lessor may collect, receive
and retain the rents resulting from such reletting and Lessee shall
receive a credit against amounts owed by Lessee hereunder for all
such amounts of rent collected. Lessor shall not be liable to
Lessee for any failure to relet any property or for any failure to
collect any rent due upon such reletting. LESSOR SHALL HAVE NO DUTY
TO MITIGATE ITS DAMAGES UNLESS REQUIRED BY LAW.
Neither (a) the termination of this
lease as to all or any of the Demised Premises pursuant to Section
15.2; (b) the repossession of all or any of the Demised Premises
after an Event of Default; nor (c) the failure of Lessor to collect
or receive any rentals due upon any such reletting after an Event
of Default, shall relieve lessee of its liabilities and obligations
hereunder, all of which shall survive any such termination,
repossession or reletting. If any Event of Default shall have
occurred and be continuing and notwithstanding any termination of
this Lease pursuant to Section 15.1, Lessee shall forthwith pay to
Lessor all Rent and other sums due and payable hereunder to and
including without limitation the date of such termination.
Thereafter, on the days on which the Fixed Rent or Supplemental
Rent, as applicable, are payable under this Lease or would have
been payable under this Lease if the same had not been terminated
pursuant to Section 15.1 and until the end of the Term hereof or
what would have been the Term in the absence of such termination,
Lessee shall pay Lessor, as current liquidated damages (it being
agreed that it would be impossible accurately to determine actual
damages) an amount equal to the Fixed Rent and supplemental Rent
that are payable under this Lease or would have been payable by
lessee hereunder if this lease had not been terminated pursuant to
Section 15.1, less the net proceeds, if any, which are actually
received by Lessor with respect to the period in question of any
reletting of any Demised Premises or any portion thereof. In
calculating the amount of such net proceeds from reletting, there
shall be deducted all of Lessor’s reasonable expenses in
connection therewith, including without limitation repossession
costs, brokerage or sales commissions, fees and expenses for
counsel and any necessary repair or alteration costs and expenses
incurred in preparation for such reletting. At any time after
termination of this Lease by Lessor pursuant to Section 15.1, in
lieu of collecting any further monthly deficiencies as aforesaid,
Lessor shall be entitled to recover from Lessee, and Lessee shall
pay to Lessor, on demand, as damages, in addition to other amounts
owing under the Lease, minus any monthly deficiency amounts
previously recovered from Lessee, an amount equal to the present
value (discounted to the date of such breach at the rate of not
more than four percent per annum) of the Rent reserved in the lease
from the date of such Event of Default to the date of expiration of
the initial Term (or extended Term if the Event of Default occurs
during an extended Term). To the extent Lessor receives any damages
pursuant to this Section 15.4, such amounts shall be regarded as
amounts paid on account of Rent. Lessee specifically acknowledges
and agrees that its obligations under this Section 15.4 shall be
absolute and unconditional under any and all circumstances and
shall be paid and/or performed, as the case may be, without notice
or demand and without any abatement, reduction, diminution, setoff,
defense, counterclaim or recoupment whatsoever.
14
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15.5
|
Assignment of Rights Under
Contracts .
|
If this Lease been terminated
pursuant to Section 15.1, Lessee shall upon Lessor’s demand
immediately assign, transfer and set over to Lessor all of
Lessee’s right, title and interest in and to each agreement
executed by Lessee in connection with the acquisition,
installation, testing, use, development, construction, operation,
maintenance, repair, refurbishment and restoration of the Equipment
(including without limitation all right, title and interest of
Lessee with respect to all warranty, performance, service and
indemnity provisions), as and to the extent that the same relate to
the acquisition, installation, testing, use, development,
construction, operation, maintenance, repair, refurbishment and
restoration of the Demised Premises or any of it.
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15.6
|
Remedies
Cumulative .
|
The remedies herein provided shall
be cumulative and in addition to (and not in limitation of) any
other remedies available at law, equity or otherwise.
ARTICLE XVI
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16.1
|
Lessor’s Right to Cure Lessee’s
Lease Defaults .
|
Lessor, may (but shall be under no
obligation to) remedy any Event of Default for the account and at
the sole cost and expense of Lessee, including without limitation
the failure by Lessee to maintain the insurance required by Article
12, and may, to the fullest extent permitted by law, and
notwithstanding any right of quiet enjoyment in favor of Lessee,
enter upon the Demised Premises, and take all such reasonable
action thereon as may be necessary or appropriate therefor. No such
entry shall be deemed an eviction of any Lessee. All out-of-pocket
costs and expenses so incurred (including without limitation fees
and expenses of counsel), together with interest thereon at the
Overdue Rate from the date on which such sums or expenses are paid
by Lessor, shall be paid by Lessee to Lessor on demand.
ARTICLE XVII
If Lessor should default in the
performance of any of its obligations under this Lease for a period
of more than thirty (30) days after receipt of written notice by
Lessee specifying such default, or if such default is of a nature
to require more than thirty (30) days to remedy and continues
beyond the time reasonably necessary to cure such default (or
Lessor has not undertaken procedures to cure such default within
such thirty (30) day period or diligently pursued such procedures),
Lessee may, in addition to any other remedy available at law or in
equity, (i) terminate this Lease or (ii) incur any expense
necessary to perform the obligation of Lessor specified in such
notice and deduct such expense from the Fixed Rent or other changes
next becoming due to Lessor.
15
ARTICLE XVIII
If Lessee shall for any reason
remain in possession of the Demised Premises after the expiration
or earlier termination of this Lease, such possession shall be on a
month-to-month basis during which time Lessee shall continue to pay
Supplemental Rent that would be payable by Lessee hereunder were
the Lease then in full force and effect with respect to the such
Demised Premises, and Lessee shall continue to pay Fixed Rent at
the lesser of the highest lawful rate or one hundred fifty percent
(150%) of the last payment of Fixed Rent due with respect to such
Demised Premises prior to such expiration or earlier termination of
this Lease. Such Fixed Rent shall be payable from time to time upon
demand by Lessor. During any month-to-month holdover of tenancy,
Lessee shall, be obligated to perform and observe all of the terms,
covenants and conditions of this Lease, but shall have no rights
hereunder other than the right, to the extent given by law to
tenants at sufferance, to continue their occupancy and use of the
Demised Premises. Nothing contained in this Article shall
constitute the consent, express or implied, of Lessor to the
holding over of Lessee after the expiration or earlier termination
of this Lease as to the Demised Premises and nothing contained
herein shall be read or construed as preventing Lessor from
maintaining a suit for possession of such Demised Premises or
exercising any other remedy available to Lessor contained in this
Lease.
ARTICLE XIX
During the Term, the risk of loss or
decrease in the enjoyment and beneficial use of such Demised
Premises as a result of the damage or destruction thereof by fire,
the elements, casualties, thefts, riots, wars or other force majure
is assumed by Lessee, and Lessor shall in no event be answerable or
accountable therefor (except to the extent of any required payments
by Lessor of insurance or condemnation proceeds if provided in this
Lease).
ARTICLE XX
(a) Lessee may not sublet, assign or
otherwise transfer this Lease or any of its rights or obligations
hereunder without the prior written consent of the Lessor, which
consent shall not be unreasonably withheld.
(b) No assignment by Lessee
(referenced in this Section 20.1 above) or other relinquishment of
possession to the Demised Premises shall in any way discharge or
diminish any of the obligations of Lessee to Lessor hereunder, and
Lessee shall remain directly and primarily liable under the Lease
as to any rights or obligations assigned by Lessee or regarding the
Demised Premises in which rights or obligations have been assigned
or otherwise transferred.
(c) Notwithstanding the foregoing,
Lessee shall have the absolute right to sublet, assign or otherwise
transfer its rights and obligations hereunder, without
Lessors’
16
approval, to: (i) any parent or
subsidiary of Lessee; (ii) any subsidiary of Lessee’s parent;
(iii) any entity with which lessee may merge or consolidate, or
(iv) any entity or individual which purchases all or substantially
all of the assets or a majority of the equity interest of Lessee,
either in, one transaction or a series of transactions.
ARTICLE XXI
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21.1
|
No Waiver
of Default .
|
No failure by Lessor or Lessee to
insist upon the strict performance of any term, duty, obligation,
covenant or condition required to be performed by the other party
under this Lease hereof or shall constitute a waiver of any such
default or of any such term. To the fullest extent permitted by
law, no waiver of any default shall affect or alter this Lease, and
this Lease shall continue in full force and effect with respect to
any other then existing or subsequent default. In addition, no
waiver of any particular right by either party shall be deemed to
waive its assertion of that right or any other rights in the
future.
ARTICLE XXII
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22.1
|
Acceptance of Surrender
.
|
Subject to Section 2.2, no surrender
to Lessor of this Lease or of all or any portion of the Demised
Premises or of any part of any thereof or of any interest therein
shall be valid or effective unless agreed to and accepted in
writing by Lessor and no act by Lessor or any representative or
agent of Lessor, other than a written acceptance, shall constitute
an acceptance of any such surrender.
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22.2
|
No Merger
of Title .
|
There shall be no merger of this
Lease or of the leasehold estate created hereby and the fee estate
in the Demised Premises by reason of the fact that the same Person
(other than Lessee) may acquire, own or hold, directly or
indirectly, in whole or in part, the fee title to the Demised
Premises and (a) this Lease or the leasehold estate created hereby
or any interest in this Lease or such leasehold estate, (b) any
right, title or interest in any Demised Premises, or (c) a
beneficial interest in Lessor.
ARTICLE XXIII
All notices required or permitted to
be given hereunder shall be in writing. Notices may be served by
certified or registered mail, postage paid with return receipt
requested; by private courier, prepaid; by telex, facsimile, or
other telecommunication device capable of transmitting or creating
a written record; or personally. Mailed notices shall be deemed
delivered five (5) days after mailing, properly addressed.
Couriered notices shall be deemed delivered when delivered as
addressed, or if the addressee refuses delivery, when presented for
delivery notwithstanding such refusal. Telex or telecommunicated
notices shall be deemed delivered when receipt is either confirmed
by confirming transmission equipment or acknowledged by
the
17
addressee or its office. Personal delivery shall
be effective when accomplished or if the addressee refuses
delivery, when presented for delivery notwithstanding such refusal.
Unless a party changes its address by giving notice to the other
party as provided herein, notices shall be delivered to the parties
at the following addresses:
If to Lessor:
Pursell Holdings, LLC
P. O. Box 1187
Sylacauga, Alabama 35150
Attention: James T.
Pursell
Fax No.: (256) 249-7428
With a copy to:
Womble Carlyle Sandridge & Rice,
PLLC
1201 West Peachtree
Street
Suite 3500
Atlanta, Georgia 30309
Attention: Sharon L. McBrayer,
Esq.
Fax No.: (404) 870-4825
and notices to Lessee shall be addressed as
follows:
Sylorr Plant Corp.
8825 Page Boulevard
St. Louis, Missouri 63114
Attention: Brian Mackay
Fax No.: 314-253-5925
With a copy to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attention: Richard Porter
Fax No.: 312-861-2200
From time to time any party may
designate additional patties and/or another address for notice
purposes by written notice to each of the other parties
hereto.
ARTICLE XXIV
Anything contained in this Lease to
the contrary notwithstanding, all claims against and liabilities of
Lessee or Lessor arising from events commencing prior to the
expiration or earlier
18
termination of this Lease shall survive such
expiration or earlier termination. If any provision of this Lease
shall be held to be unenforceable in any jurisdiction, such
unenforceability shall not affect the enforceability of any other
provision of this Lease and such jurisdiction or of such provision
or of any other provision hereof in any other
jurisdiction.
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24.2
|
Amendments and Modifications
.
|
This Lease may be modified only by
written agreement signed by Lessor and Lessee.
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24.3
|
Successors and Assigns
.
|
All the terms and provisions of this
Lease shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
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24.4
|
Headings
and Table of Contents .
|
The headings and table of contents
in this Lease are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.
This Lease may be executed in any
number of counterparts, each of which shall be an original, but all
of which shall together constitute one (1) and the same
instrument.
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24.6
|
Memoranda
of Lease and Lease Supplements .
|
This Lease shall not be recorded;
provided , Lessor and Lessee shall promptly record (a) a
memorandum of this Lease (in substantially the form of Exhibit
“D” attached hereto) or a short form lease (in form
and substance reasonably satisfactory to Lessor) regarding the
Demised Premises, in all cases at Lessee’s cost and expense,
and as required under applicable law to sufficiently evidence this
Lease.
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24.7
|
Time is
of the Essence . Time
is of the essence of each and every provision of this
Lease.
|
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24.8
|
Estoppel
Certificates .
|
(a) Lessee agrees that from time to
time upon not less than ten (10) days prior written request by the
Lessor, Lessee will deliver to Lessor a statement in writing
certifying (a) 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 identifying the
modifications), (b) the dates to which the Fixed Rent and other
charges have been paid, and (c) that, so far as the person making
the certificate knows, the Lessor is not in default under any
provision of this Lease and if the Lessor is in default, specifying
each such default of which the person making the certificate may
have knowledge, it being understood that any such statement so
delivered may be relied upon by any prospective purchaser,
mortgagee, or assignee of any mortgage on the Demised
Premises.
19
(b) Lessor agrees that from time to
time upon not less than ten (10) days prior written request by
Lessee, Lessor will deliver to Lessee a statement in writing
certifying (a) 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 identifying the
modifications), (b) the dates to which the Fixed Rent and other
charges have been paid, and (c) that, so far as the person making
the certificate knows, the Lessee is not in default under any
provision of this Lease and if the Lessee is in default, specifying
each such default of which the person making the certificate may
have knowledge, it being understood that any such statement so
delivered may be relied upon by any prospective assignee of this
Lease, mortgagee, or assignee of any mortgage on the Demised
Premises.
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24.9
|
Governing
Law; Submission To Jurisdiction; Venue; Arbitration
.
|
(a) THIS LEASE AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF ALABAMA. Any legal action or proceeding with respect
to this Lease may be brought in the courts of the State of Alabama
in Talladega County or of the United States for the District of
Alabama, and, by execution and delivery of this Lease, each of the
parties to this Agreement hereby irrevocably accepts for itself and
in respect of its property, generally and unconditionally, the
nonexclusive jurisdiction of such courts. Each of the parties to
this Lease further irrevocably consents to the service of process
out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to it at the address set out for
notices herein, such service to become effective three (3) days
after such mailing. Nothing herein shall affect the right of any
party to serve process in any other manner permitted by law or to
commence legal proceedings or to otherwise proceed against any
party in any other jurisdiction.
(b) Each of the parties to this
Lease hereby irrevocably waives any objection which it may now or
hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this
Lease brought in the courts referred to in subsection (a) above and
hereby further irrevocably waives and agrees not to plead or claim
in any such court that any such action or proceeding brought in any
such court has been brought in an inconvenient forum.
(c) Notwithstanding the foregoing to
the contrary, upon demand of any party to this Lease, whether made
before or after institution of any judicial proceeding, any claim
or controversy arising out of, or relating to the Lease between or
among the parties hereto (a “ Dispute ”) shall
be resolved by binding arbitration conducted under and governed by
the Commercial Financial Disputes Arbitration Rules (the “
Arbitration Rules ” of the American Arbitration
Association (the “ AAA ”) and the Federal
Arbitration Act. Disputes ma
