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Exhibit 10.20
BUSINESS PROPERTY LEASE
This Agreement is made at Fulton County, Ohio, this 1 day of May, 1998, by and
between Fulton Development Company, Ltd. Lessor An Ohio LLC and Osborne
Manufacturing, Inc. (Lessee). An Ohio Corporation.
In consideration of the promises set fourth herein, and for and on behalf of
their heirs, successors, Administrators, Executors, and Assigns. The parties
agree that:
The Lessor hereby leases to the Lessee the following described premises located
in the City Township Dover, County of Fulton, and State of Ohio:
PARKING: Paved Parking included with the leased premises shall be sufficient to
accommodate 30 automobiles.
TERM: This lease shall be for the term of 5 years, Commencing on the 1st day of
June, 1998, and terminating on the 30th day of May, 2003.
RENT: Lessee shall pay as rent, the total sum of $241,200, payable in equal
monthly installments of $4,020.00, in advance, on the 1st day of each month,
commencing June 1st, 1998.
SECURITY DEPOSIT: Lessee shall deposit the additional sum of $4,020.00, as
security for Lessee's obligations under the terms of this lease.
CONDITION OF PREMISES: Unless otherwise specified herein, Lessee does hereby
accept the premises in the condition they may be in at the commencement of the
lease, subject to all defects therein, whether concealed or otherwise, except
hidden defects known to Lessor and unknown to Lessee which would not be
discoverable through a reasonable inspection by Lessee, and the release and
forever discharge Lessor from any and all damages of every kind and nature
arising hereunder. Lessee shall further indemnify and hold Lessor and the
premises (and improvements thereon) harmless from all liens and all liability in
any way arising out to the use or condition of the premises and the improvements
thereon by the Lessee.
USE OF PREMISES: The leased premises are to be used for Light Metal Fabricating
and Related Electronics Manufacturing and related purposes, and for no other
purpose.
RESPONSIBILITIES OF LESSOR:
1) Maintain and keep in proper repair any common areas not exclusively
under the control of Lessee.
RESPONSIBLITIES OF LESSEE:
1) Not attach, paint or inscribe any signs or structures on the roof or
exterior walls of the building without written consent of Lessor,
which consent shall not be unreasonably withheld.
2) Keep sidewalks and parking areas free and clear of snow, ice and other
obstructions to travel.
3) Maintain lawn areas.
4) Permit Lessor or agents of Lessor ant reasonable times to enter the
premises to examine the condition thereof and make such repairs or
improvements necessary for the safety and preservation of the
premises, or to exhibit the premises to prospective purchasers or
tenants.
5) Maintain plate glass insurance upon all glass installed in the leased
premises or replace all broken glass at Lessee's expense.
6) Hold Lessor harmless from any and all claims and demands by any person
arising from the failure of Lessee to perform any obligation hereof.
7) Not assign or transfer this lease or sublet the premises with out the
written consent of Lessor, which consent shall not be unreasonably
withheld.
8) Repair all damage caused by the negligence of Lessee, its invitees or
employees to the leased premises.
9) Lessee will made all repairs to the interior of the premises,
including, but not limited to, plumbing and electrical services and
will save Lessor harmless from and against all liens, claims and
damages by reason of any repairs or improvements which may be made by
Lessee. Lessee shall repair heating and air conditioning units in its
leased premises only. Lessor shall be responsible
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for maintenance of the roof, building exterior, repair of parking
areas, sidewalks and replacement of heating and air conditioning
units, if necessary only.
10) Surrender the premises at the end of the lease term in as good
condition as the premises are, reasonable wear and tear, and
unavoidable casualty excepted.
FIXTURES AND INTERIOR ALTERATIONS: Lessee shall make no changes in the
construction of the building or any substantial alteration to the building
interior without the written consent of Lessor. All improvements installed by
Lessee, except for portable partitions and trade fixtures, shall be deemed
permanent fixtures and the property of Lessor, unless otherwise agreed in
writing by the parties.
UTILITY AND OTHER OPERATING EXPENSES: The party set forth below shall be
responsible for the charges set forth, until Lessee shall surrender possession
of the premises:
Lessee shall pay electrical charges
Lessee shall pay heat charges
Lessee shall pay water charges
Lessee shall pay real estate taxes and assessments
Lessee shall pay fire and building insurance
None shall pay XXXXXXXXXXXXXXX
DAMAGE TO PREMISES DURING LEASE TERM: In case the premises hereby leased shall
be partially damaged by fire, but not rendered untenantable, the same shall be
repaired with all proper speed at the expense of the Lessor. If the damage shall
be so extensive that said premises are rendered unfit for occupancy by Lessee
and if said damage can be repaired within a period of 90 days from the
occurrence of said damage, then this lease shall continue in force, and it is
expressly agreed between Lessor and Lessee if Lessor shall elect to repair the
premises then the rent shall cease form the time of the occurrence and shall be
payable from the date when such repairs are completed. If the damage can not be
repaired with in 90 days, then this lease may be cancelled by either party.
HOLDOVER TENANCY: Should Lessee, with the express or implied consent of the
Lessor, continue to hold and occupy the premises after the expiration of the
term of this lease, such holding over beyond the term and the acceptance of term
by Lessor, shall operate and be constructed as creating a tenancy from month to
month, and not for any other term whatsoever. If the Lessor has a reasonable
belief that Lessee has abandoned the premises, then the landlord may re-enter
and take possession of the premises and utilize such remedies to which he is
entitled in law or equity.
INSURANCE: Lessee shall maintain liability insurance in the minimum amount of
$500,000.00 per person and $100,000.00 per accident. Lessee shall maintain fire
and building insurance in the minimum amount of $360,000.00. Said coverage
shall be reviewed annually, and if increased coverage is required Lessor shall
be responsible for payment of any increase in the cost thereof.
Lessee shall not do or permit anything to be done in said premises, or bring or
keep anything therein which will in any way increase the rate of fire
insurance on said building; or obstruct or interfere with the rights of other
tenants, or which conflict with the laws relating to fires, or with the
regulations of the Fire Department or with any insurance policy upon said
building or any part thereof, or conflict with any of the rules and ordinances
of the Board of Health or Building Inspection Department, or which would in any
other way be considered illegal.
In the event that any use by Lessee conflicts with any insurance policy upon
the building or in any part thereof, or increases the rate of fire insurance,
Lessee shall pay to Lessor the amount of any increased insurance premiums, if
Lessor is responsible for payment of said premiums. WAIVER OF SUBROGATION:
Lessor agrees to cause each insurance policy carried by Lessor insuring the
demised premises against loss by fire or other causes covered by the standard
extended coverage endorsement, to be written in a manner so as to provide that
the insurance company waives all right of recovery by way of subrogation
against Lessee for any loss or damage covered by any such policy. Lessee shall
not be liable to the Lessor or any other party for any loss or damage caused by
fire or any of the risks enumerated in the standard extended coverage
endorsement. Lessee agrees standard extended coverage endorsement, to be
written in a manner so as to provide that the insurance company waives all
right of
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recovery by way of subrogation against Lessor for any loss or damage covered by
such policy, Lessor shall not be liable to the Lessee or any other party for any
loss or damage caused by fire or any of the risks enumerated in the standard
extended coverage endorsement.
SUBORDINATION: Lessor shall have the right at any time, and from time to time,
to place upon the building and/or land on which the premises are a part, or upon
any underlying leasehold estate, a mortgage or mortgages which shall be wholly
prior to the right of Lessee under this lease, and Lessee will, upon demand,
execute any and all instruments deemed necessary by Lessor to effectuate
subordination of this Lease to such mortgage.
APPROPRIATION OR CONDEMNATION BY GOVERNMENTAL AUTHORITY: If the premises shall
be appropriated or condemned by governmental authorities, each party shall be
entitled to seek its respective remedy as provided by law.
REMEDIES IN EVENT OF DEFAULT BY LESSEE: If the rent, or any part thereof, shall
at any time be in arrears and unpaid, with or without demand being made
therefore, or if Lessee shall fail to keep and perform and observe any of the
conditions of this lease, or if Lessee shall be adjudicated a Bankrupt or shall
make an assignment for creditors, or if the interest of the Lessee herein shall
be sold under execution, or other legal process, it shall be lawful for Lessor
to enter into the premises the same as if the lease had not been made, and
thereupon this lease, and everything herein contained on the part of said Lessor
to be performed, shall cease and be void without prejudice, however, to the
right of the Lessor to recover from Lessee all rent due up to the time of such
entry. In case of such default and entry by Lessor, Lessor may re-let the
premises for the remainder of the term for the highest rent obtainable and may
recover from Lessee any deficiency between the amount obtained and the amount
owed by the Lessee. No waiver by Lessor of any default or breach by Lessee of
any obligation shall be construed to be a waiver of the rights of the Lessor to
any remedy resulting from a future default or breach by Lessee of any of
Lessee's obligations.
All notices and payments shall be made to Lessor at the following address:
Fulton Development Company, Ltd. (Address withheld)
All notices to Lessee shall be addressed as follows:
(Address withheld)
RENEWAL OPTION: Lessee shall have the right to renew its lease under
the following terms:
ADDITIONAL TERMS: Attached hereto and made a part of this lease.
LEASE IS A BINDING CONTRACT. IT IS RECOMMENDED THAT LESSOR AND LESSEE
CONSULT AN ATTORNEY PRIOR TO SIGNING THIS LEASE.
Witness: David E. Ruth, Co-Managing Partner
/s/ Douglas Stallings /s/ David E. Ruth
---------------------- -----------------
/s/ Jack H. Ruth Lessor - Fulton Development Company, Ltd.
---------------------- Jack H. Ruth, Member
Fulton Development Company, Ltd.
Witness:
/s/ Douglas Stallings
----------------------
/s/ Jack H. Ruth Jon Osborne, President
---------------------- ----------------------
Lessee - Osborne Manufacturing, Inc.
THIS LEASE IS THE ENTIRE AGREEMENT BETWEEN THE PARTIES.
STATE OF OHIO, LUCAS COUNTY,ss:
Before me appeared Dave Ruth & Jon Osborne who acknowledged that the execution
of this lease was his free act and deed.
/s/ Douglas E. Stallings
------------------------
Douglas E. Stallings
My commission has no expiration
This instrument was prepared by:
Both parties
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FULTON DEVELOPMENT COMPANY, LTD.
9306 County Road 14 Phone: (419) 335-7884
Wauseon, Ohio 43567 Fax: (800) 535-9076
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ADDITIONAL TERMS
1. In a timely manner, the following alterations and improvements will be
completed: (1) New separate toilets and washrooms, one for men and one for
women, to meet Ohio State building codes. (2) Necessary repairs to the roof to
make the roof weather tight.
2. In a timely manner, all exterior siding will be replaced and or painted, so
as to present a clean, homogeneous appearance. At the earliest moment, an
employee parking lot will be paved with the black top material to accommodate 30
automobiles on southside of building.
3. All overhead doors and service doors will be replaced or repaired to make the
building accessible and secure.
4. All heaters will be reconditioned and repaired to meet Ohio State code.
5. Line AA in Topo drawing indicates an East/West line separating the property.
All property South of line AA will be the responsibility of the Lessee to
maintain with the exception of the existing pole building. This area is 1,202
acres more or less. Included as "Addendum A" attached hereto and made a part of
this lease.
6. Unitrend, Inc. (Guarantor) will guaranty payment of Lessee as more completely
stated in "Addendum B", attached hereto and made a part of this lease.
7. Electrical service identified in paragraph 9 of Lessee's responsibilities,
which are the responsibility of Lessee, shall be limited to those electrical
connections/conduits/switches from the inside transformer, to inward electrical
needs, including the circuit breaker box and disconnects.
8. Lessor, in consideration of the Lessee's entering into this lease agreement,
receipt of which is acknowledged by Lessor, grants to Lessee the exclusive tight
and option to purchase the property described in the lease agreement based upon
the following terms and conditions:
a. Such purchase option shall become effective upon the first
year anniversary of the renewal of the lease (the Lessee's
sixth year of possession), and shall run continuously from
year-to-year thereafter.
b. In order to effectively exercise this purchase option, Lessee
must provide written notice sent by certified mail to the
Lessor's last known business address or listed statutory agent
no more than 90 days prior nor less than 30 days prior to the
yearly anniversary date of the renewal of the lease.
c. The purchase price of the property shall be a price to be
negotiated between the parties, with no payments under the
lease being applied toward the purchase price of the property.
d. Upon reaching an agreement as to the purchase price, a
purchase agreement shall be created, reflecting the
agreed-upon purchase price and other agreed-upon purchase
terms.
e. In the event the exercise of this option results in the sale
of the property, Lessor agrees to convey the property to
Lessee by warranty deed free and clear of all encumbrances
except the taxes and assessments which under this lease are to
be paid by Lessee.
f. This purchase option shall be transferable to the Lessee's
successors and assigns.
9. Real estate taxes and assessments which are the responsibility of the Lessee
as defined in that paragraph of this lease pertaining to the division of
responsibilities for utilities and other operating expenses between the parties
shall be limited to those real property tax responsibilities based upon Lessee's
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proportion of overall use and access of the property. Attached hereto and made a
part of this agreement is "Addendum C" which depicts the parties agreed-upon
allotments of real estate tax responsibilities of the property based upon the
Lessee's utilization of the property. Future
taxes/assessments/reductions/credits which are utilizing the percentages derived
from the numbers found for the appropriate categories shown therein.
10. Osborne Manufacturing, Inc. and/or Unitrend, Inc. shall be granted right of
first refusal to purchase the property.
11. Lessor shall pay all proportional taxes and assessments which shall become
due and payable up to date of commencement of lease.
