Nanophase Technologies Corporation - 10-K [nanx-10k_123116.htm]

Exhibit 10.51

 

    BUILDING LEASE               DATE OF LEASE   TERM OF LEASE   BASE RENT
AMOUNT MARCH 13,  2017   Beginning               Ending   $176,382.00 for first
year     9/15/2017               9/15/2021                         LOCATION OF
PREMISES:   451 Commerce
Burr Ridge, Illinois   Security Deposit:
$ 10,000.00           DESCRIPTION OF PREMISES:      The property being leased
hereunder is as depicted upon That diagram/site plan attached hereto as Exhibit
A, together with those rights of ingress, egress, storage and loading set forth
herein.          

 

LESSEE   LESSOR       Name: Nanophase Technologies Corporation   Name: Village
of Burr Ridge      

Address:  451 Commerce

  Burr Ridge, IL

 

Address: 7660 S. County Line Rd.

  Burr Ridge, IL 60521

  

In consideration of the mutual covenants and agreements herein stated, Lessor
hereby leases to Lessee and Lessee hereby leases from Lessor, the premises
designated above (the “Premises”), together with the appurtenances thereto, for
the above Term.

 

1.          Rent:    Lessee shall pay Lessor the base rent amount of
$176,382.00, which consists of $8.82/square foot for 20,000 square feet, in
twelve (12) equal installments in the amount of Fourteen Thousand Six Hundred
Ninety-Eight and 50/100 Dollars ($14,698.50) as rent for the Premises, at
Lessor’s address as shown above, payable on or before the 15th of each calendar
month. The first monthly payment, and the security deposit in the amount of
$10,000 shall be due on or before September 15, 2017. Rent shall continue to be
due monthly for the term of this Lease to be calculated based upon the
following: for each year after the first year of this Lease, the base rental
amount of $176,382.00 will increase annually by that percentage equal to the
annual percentage increase for the preceding twelve (12) months in the Consumer
Price Index, (Chicago-All Items for all Urban Wage Earners and Clerical Workers)
(CPI-W) or an amount of 3% annually, whichever is greater.

 

2.          Improvements:    Lessee shall be responsible for any improvements to
the Premises, including, for example, carpeting, lighting and fixtures,
partitions or ceiling enhancements, provided that any alteration or addition to
the Premises by Lessee requires the prior written consent of Lessor. Said
consent will not be unreasonably withheld by Lessor.

  

 

 

3.          Condition and Upkeep of Premises:    Lessee has examined and knows
the condition of the Premises and has received the same in good order and
repair, and acknowledges that no representations as to the condition and repair
thereof have been made by Lessor, or his agent, prior to or at the execution of
this Lease that are not herein expressed; Lessee will keep the Premises
including all appurtenances, in good repair, replacing all broken glass and all
damaged plumbing fixtures with others of equal quality, and will keep the
Premises, including adjoining areas, in a clean and healthful condition
according to the applicable municipal ordinances during the term of this Lease
at Lessee’s expense. Lessor will remove all snow and ice from the roof when
necessary, and will be responsible for snow removal, as needed, from the
sidewalk abutting the Premises and parking lot serving the Premises. Upon the
termination of this Lease, for any reason, Lessee will yield up the Premises to
Lessor, in good condition and repair, loss by fire and ordinary wear excepted.
Lessor has responsibility for upkeep of all areas on the exterior of building,
including, but not limited to the roof, parking area, grass area, sidewalks and
exterior walls. Lessee has responsibility for upkeep of all elements on the
interior of the space within the Premises, including, but not limited to,
plumbing, electric, and H.V.A.C. equipment and facilities. Lessor represents
that the plumbing, electric, gas and H.V.A.C. equipment and facilities is in
good working order at the commencement of this lease. Lessor shall not be
obliged to incur any other expense for repairing any improvements upon said
demised premises or connected therewith, and the Lessee at his own expense will
keep all improvements in good repair (injury by fire, or other causes beyond
Lessee’s control excepted) as well as in a good tenantable and wholesome
condition, and will comply with all local or general regulations, laws and
ordinances applicable thereto. If Lessee does not make repairs as required
hereunder promptly and adequately, Lessor may, but need not make such repairs
and pay the costs thereof, and such costs shall be so much additional rent
immediately due from and payable by Lessee to Lessor. Lessee is obligated to
provide Lessor prompt notice of any necessary repairs for which Lessor may be
responsible.

 

4.          Lessee’s Access to Premises:    Lessee shall have rights of
reasonable ingress and egress to the Premises over the paved portions and
sidewalks on Lessor’s property as well as ingress and egress rights over
Lessor’s property to access Lessee’s loading dock and shared use of Lessor’s
paved parking area. Lessee shall also be entitled to reasonable use of that area
needed to the south of the Premises to locate its outside storage tank(s). The
storage tank(s) shall be located generally in that area depicted for such use on
Exhibit A. Lessee agrees to locate and install said tank(s) in a neat and
orderly fashion. Lessee shall petition the Village of Burr Ridge or other
applicable governmental entity for any variations(s) or permit(s) that may be
needed to lawfully locate, construct and/or operate such tanks, Lessor
acknowledges that said storage tanks are an integral part of Lessee’s use of the
Premises. If such permit, variation or approval as is needed to permit the
lawful construction and use of such tanks is denied by the governmental entity
with jurisdiction, Lessee shall have the option, within thirty (30) days after
such denial, to terminate this Lease.

 

 

 

5.          Lessee Not to Misuse; Sublet; Assignment:    Lessee will not allow
the Premises to be used for any purpose that will increase the rate of insurance
thereon for Lessor, and will not load floors with machinery or goods beyond the
floor load rating prescribed by applicable governmental ordinances, and will not
allow the Premises to be occupied in whole, or in part, by any other person, and
will not sublet the same or any part thereof, nor assign this Lease without in
each case the prior written consent of the Lessor first had, and Lessee will not
permit any transfer by operation of law, mortgage or other encumbrance of the
interest in the Premises acquired through this Lease. Lessee will not permit the
Premises to be used for any unlawful purpose, or for any purpose that will
injure the reputation of the building or increase the fire hazard of the
building, or disturb the neighborhood, provided however, it is understood and
acknowledged by Lessor that Lessee will conduct certain warehousing and
manufacturing activities on the Premises and such activities shall be permitted
if in compliance with applicable federal, state and local law. Lessee will not
allow any signs, cards or placards to be posted, or placed thereon, nor permit
any alteration of or addition to any part of the Premises, except by written
consent of Lessor which consent would not be unreasonably withheld; all
alterations and additions to the Premises shall remain for the benefit of Lessor
unless otherwise provided in the consent aforesaid. Lessor represents that the
Premises are currently zoned for Lessee’ s manufacturing, warehousing and office
uses.

 

6.          Mechanic’s Lien:     Lessee will not permit any mechanic’s lien or
liens to be placed upon the Premises or any building or improvement thereon
during the term hereof, and in case of the filing of such lien Lessee will
promptly pay same. If a default in payment shall continue for thirty (30) days
after written notice to Lessee from Lessor to the Lessee, the Lessor shall have
the right and privilege at Lessor’s option of paying the same or any portion of
the lien amount without inquiry as to its validity, and any amounts so paid,
including expenses and interest, shall be so much additional indebtedness
hereunder due from Lessee to Lessor and shall be repaid to Lessor immediately on
tender of bill the lien costs.

 

7.          Indemnify for Accidents:    Lessee covenants and agrees that it will
protect and save and keep the Lessor forever harmless and indemnified against
and from any penalty or damages or charges imposed for any violation of any laws
or ordinances, whether occasioned by the neglect of Lessee or those holding
under Lessee, and that Lessee will at all times protect, indemnify and save and
keep harmless the Lessor against and from any and all loss, cost, damage or
expense, arising out of or from any accident or other occurrences on or about
the Premises, causing injury to any person or property whomsoever or whatsoever
and will protect, indemnify and save and keep harmless the Lessor against and
from any and all claims and against and from any and all loss, cost, damage or
expense arising out of any failure of Lessee in any respect to comply with and
perform all the requirements and provisions hereof. Lessee agrees to obtain from
a responsible insurance company, or companies, at its expense, public liability
insurance in an amount not less than ONE MILLION ($1,000,000.00) DOLLARS with
respect to any one accident and FIVE HUNDRED THOUSAND ($500,000.00) DOLLARS
property damage with respect to any one accident, and a certificate as to such
insurance shall be deposited with Lessor.

 

8.          Non-Liability of Lessor:    None of the provisions of this Lease
shall operate to waive any protections or immunities from suit or liability that
the Lessor is entitled to as a municipal entity under Illinois or Federal law.

 

 

 

9.          Water, Gas and Electric Charges:    Lessee will pay, in addition to
the rent above specified, all water rents, gas and electric light, and power
bills taxed, levied or charged on the Premises, for and during the time for
which this Lease is granted, and in case said water rents and bills for gas,
electric light and power shall not be paid when due, Lessor shall, upon three
days notice to Lessee have the right to pay the same, which amounts so paid are
declared to be so much additional rent and payable with the installment of rent
next due thereafter. Such services shall be separately metered.

 

10.        Lessor’s Access to Premises:    Lessor and its designees shall have
the right, upon reasonable notice to Lessee, to enter upon the Premises at all
reasonable hours (and in emergencies at all times and without notice): (a) to
inspect the same; (b) to make repairs, additions or alterations to the Premises
or the building in which the same are located or any property owned or
controlled by Lessor; provided, however, if Lessor intends to be reimbursed by
Lessee for any such repairs, additions or alterations, it shall so notify Lessee
at least fourteen (14) days prior. to taking any such action in order for Lessee
to determine whether it is responsible for any such repairs, additions or
alterations. Lessor shall also have the right to utilize the unused portion of
the area designated on Exhibit A as the “OUTSIDE STORAGE TANK AREA”, (“AREA”)
including ingress and egress to and across such AREA, for its Public Works’
operations. Prior to such use of the AREA, Lessor agrees, at Lessor’s expense,
to install a chain link security fence around that portion of the AREA currently
used by Lessee for its storage tank(s). Lessor agrees to construct the fence in
compliance with applicable IEPA standards and requirements regarding the
security of Lessee’s existing storage tank(s) in the AREA. In the event Lessor
constructs said fence, Lessee shall be allowed continued access, as may be
needed, to maintain its HVAC equipment and storage tank(s) in the AREA.

 

11.        Option Period:     Lessee has the right to extend the Lease term for
three (3) consecutive 12 month periods. The annual rent escalation for each of
the one year option periods will continue to be determined in the manner
utilized during the initial 48 month Lease term. Responsibility for real estate
taxes will continue to be determined in the manner utilized during the initial
36 month Lease term. Lessee must provide written notice to Lessor of its intent
to exercise this option to extend the lease for a 12 month period at least six
(6) months prior to the expiration of the term of the Lease. Notice must be
provided in conformance with paragraph 25.

 

12.        Abandonment and Reletting:    If Lessee shall abandon or vacate the
Premises, or if Lessee’ s right to occupy the Premises is terminated by Lessor
by reason of Lessee’s breach of any of the covenants herein, the same may be
re-let by Lessor for such rent and upon such terms as Lessor may reasonably deem
fit, subject to Illinois statute; and if a sufficient sum shall not thus be
realized monthly, after paying the out-of-pocket expenses of such re-letting and
collecting to satisfy the rent hereby reserved, Lessee agrees to satisfy and pay
all deficiencies monthly during the remaining period of this Lease. Lessor shall
exercise reasonable efforts to obtain a new lessee to occupy the Premises
following abandonment or vacation thereof by Lessee at a rate of rental then
prevailing in the Burr Ridge area and upon such other lease terms as are herein
contained. Upon abandonment or vacation of the Premises, Lessee’s obligation is
to restore the Premises to its original condition at the commencement of this
Lease and return the Premises to Lessor in good condition and repair, provided,
however, Lessee shall not be required to remove any improvements to the Premises
approved by Lessor (unless such improvements are special or unique to Lessee’s
business, as reasonably determined by Lessor, and are so conditioned by Lessor).
Lessee shall be solely responsible for the complete removal of any outside
storage tank(s) and restoration of the affected location of the tank(s).

 

 

 

13.        Hazards and Hazardous Substances:    Lessor hereby represents that it
has not brought or caused any hazardous materials to exist on, within, or under
the Premises as of the commencement of Lessee’s occupancy hereunder in violation
of applicable environmental requirements under local, Illinois or Federal law.
Lessee shall not cause or permit any hazardous material to be brought upon, or
kept or used in or about the premises by Lessee, its agents, employees,
contractors, or invitees, without the prior written consent of Lessor, (which
consent Lessor shall not unreasonably withhold) so long as Lessee demonstrates
to Lessor’s reasonable satisfaction that such hazardous material is necessary or
useful to Lessee’ s business and will be used, kept, and stored and disposed of
in a manner that complies with all laws, rules, statutes, and ordinances
regulating any such hazardous material so brought upon or used or kept in or
about the Premises. Lessor consents to Lessee’s use and storage of materials
which are determined to be hazardous in reasonable quantities on the Premises so
long as such materials are necessary or appropriate in connection with Lessee’s
manufacturing and warehousing uses on the Premises. If Lessee or Lessor breach
their respective representations or obligations stated above in this paragraph,
or if the presence of hazardous material on or about the Premises caused or
permitted by Lessee or Lessor results in contamination of the Premises or
Lessor’s adjacent property, or if contamination of the Premises or surrounding
area by hazardous material otherwise occurs the responsible party (Lessee or
Lessor) shall indemnify, defend, and hold harmless the other from any and all
claims, judgments, damages, penalties, fines, costs, liabilities, or losses
(including, without limitation, diminution in value of the Premises or Lessor’s
adjacent property, or the entire building, damages for the loss or restriction
on the use of rentable or usable space or of any amenity of the Premises or
Lessor’s adjacent property, damages arising from any adverse impact on marketing
of space in the building, and sum paid in settlement of claims, reasonable
attorneys’ fees, reasonable consultant fees and expert fees) that arise during
or after the term of this Lease as a result of that contamination. This
indemnification includes, without limitation, reasonable costs incurred in
connection with any investigation of site conditions or any cleanup, remedial,
removal, or restoration work required by any federal, state, or local
governmental agency or political subdivision because of hazardous material
present in the soil or ground water on, under or about the Premises or Lessor’s
adjacent property. Without limiting the above, if the presence of any hazardous
material on or about the Premises caused or permitted by either Lessor or Lessee
results in any contamination of the Premises or surrounding area, or causes the
Premises or surrounding area to be in violation of any laws, rules, statutes, or
ordinances, the responsible party (Lessee or Lessor) shall promptly take all
actions at its sole expense as are necessary to return the Premises and
surrounding area to the condition existing before the introduction of any such
hazardous material; provided that, if Lessee is responsible, Lessor’s approval
of those actions shall first be obtained, which approval shall not be
unreasonably withheld so long as those actions would not potentially have any
material adverse long-term or short-term effect on the Premises or surrounding
area.

 

 

 

As used in this Lease, the term “hazardous material” means any hazardous or
toxic substance, material or waste which is or becomes regulated by any local
governmental authority, the state of Illinois, or the United States government,
including any material which, when present, would require environmental
remediation (“clean-up”) under any such local, Illinois or Federal law. Lessee
shall not allow, keep or use on the Premises any inflammable or explosive
liquids or materials save such as may be necessary for use in the business of
the Lessee, and in such case, any such substances shall be delivered and stored
in amount, and used, in accordance with the rules for the applicable Board of
Underwriters and statutes and ordinances now or hereafter in force. Further, no
unlawful activities of any kind shall be conducted by Lessee on the Premises.

 

Nothing in this paragraph 13 shall be construed to impose any additional
liability whatsoever upon either of the parties hereto as a result of any acts
or omissions of any third parties, specifically including any tenants leasing
other space from Lessor.

 

14.        Default by Lessee:    If Lessee shall vacate or abandon the Premises,
or in case of the non-payment of the rent reserved hereby, or any part thereof,
or of the breach of any covenant in this Lease, Lessee’s right to the possession
of the Premises thereupon shall terminate upon written notice to Lessee from
Lessor and upon Lessee’s failure to cure any such default within sixty (60) days
of receipt of such notice, and the mere retention of possession thereafter by
Lessee shall constitute a forcible detainer of the Premises; and if the Lessor
so elects, but not otherwise, and upon written notice of such election to
Lessee, this Agreement shall thereupon terminate, and upon the termination of
Lessee’s right of possession, as aforesaid, whether this Agreement be terminated
or not, Lessee agrees to surrender possession of the Premises immediately,
without the receipt of any demand for rent, notice to quit or demand for
possession of the Premises whatsoever, and hereby grants to Lessor full and free
license to enter into and upon the Premises or any part thereof, to take
possession thereof after due process of law, and to expel and to remove Lessee
or any other person who may be occupying the Premises or any part thereof, and
Lessor may repossess itself of the Premises as of its former estate, but such
entry of the Premises shall not constitute a trespass or forcible entry or
detainer, nor a waiver of any covenants, agreement or promise in this Agreement
contained, to be performed by Lessee. The acceptance of rent, whether in a
single instance or repeatedly, after it falls due, or after knowledge of any
breach hereof by Lessee, or the giving or making of any notice or demand,
whether according to any statutory provision or not, or any act or series of
acts except as an express written waiver, shall not be construed as a waiver of
Lessor’s rights hereunder, or as an election not to proceed under the provisions
of this Agreement.

 

15.        Real Estate Taxes:     Lessor is responsible for the base real estate
taxes during the Lease term. The base real estate taxes for the 2015 tax year
are $2,180.26. Following the base year of 2015, the Lessor is subsequently
responsible for the base real estate taxes plus an amount not to exceed 3%
escalation of the base taxes. Lessor’s obligation cannot increase more than 3%
over the base taxes plus escalation amount of the prior year in any subsequent
year. Following the first year, Lessee will be responsible for that portion of
annual increases in real estate taxes for each subsequent year which exceeds the
base year taxes plus a 3% escalation of that base amount, as set forth herein.
Lessee’s share shall be based on the actual increase in taxes each year, not on
its prior year’s payment or share. Lessee’s payment, as required hereunder,
shall be due upon issuance of the final tax bill for the second installment of
taxes each year, within thirty (30) days of receipt of notice from Lessor, along
with a copy of the tax bill and a reasonably itemized statement by the Village
showing the calculation by which Lessee’s share of such tax bill was determined.
Nothing in this paragraph shall limit Lessor or Lessee in the exercise of any
rights afforded by Illinois law to challenge any assessment amount arrived at by
the Assessor/County Clerk provided that any such challenge shall not delay or
excuse the payment obligations of Lessor and Lessee set forth above.

 

 

 

16.        No Rent Deduction or Set Off:    Lessee’s covenant to pay rent is and
shall be independent of each and every other covenant of this Lease. Lessee
agrees that any claim by Lessee against Lessor shall not be deducted from rent
nor set off against any claim for rent in any action.

 

17.        Security Deposit:    The security deposit required herein shall be
available to Lessor for its use or reimbursement to satisfy any of Lessee’s
obligations hereunder, if Lessee shall fail to meet or abide by such
obligations. Lessor shall otherwise be allowed to use such security deposit
monies as permitted by law.

 

18.        Rent after Notice or Suit:    It is further agreed, by the parties
hereto, that after the service of notice, or the commencement of a suit or after
final judgment for possession of the Premises, Lessor may receive and collect
any rent due, and the payment of said rent shall not waive or affect said
notice, said suit, or said judgment.

 

19.        Payment of Costs:    Lessee will pay and discharge all reasonable
costs, attorney’s fees and expenses that shall be made and incurred by Lessor in
enforcing the covenants and agreements of this Lease.

 

20.        Rights Cumulative:     The rights and remedies of Lessor under this
Lease are cumulative. The exercise or use of any one or more thereof shall not
bar Lessor from exercise or use of any other right or remedy provide herein or
otherwise provided by law, nor shall exercise nor use of any right or remedy by
Lessor waive any other right or remedy.

 

21.        Fire and Casualty:     In the event the Premises are substantially
damaged by fire or other casualty, Lessor shall, within sixty (60) days, notify
Lessee in writing as to whether said Premises will be rebuilt or repaired, and
in the event Lessor fails to so notify Lessee, Lessee may, at its option,
terminate this Agreement by giving written notice to Lessor within ten (10) days
after the expiration of said sixty (60) days. If Lessor so notifies Lessee that
the Premises will be rebuilt or repaired, then this Agreement shall continue in
effect upon the same terms and conditions; provided, however, if Lessor fails to
rebuild or repair said Premises within sixty (60) days following the expiration
of the sixty (60) day period in which Lessor must notify Lessee of such action,
then Lessee may terminate this Agreement upon written notice to Lessor; and
provided further, if Lessor so notifies Lessee that the Premises will be rebuilt
or repaired, Lessee may, at its option, terminate this Agreement by giving
written notice to Lessor within sixty (60) days after Lessor has so notified
Lessee. If Lessor notifies Lessee that the Premises will not be rebuilt or
repaired, and same are, in fact, not rebuilt or repaired within 180 days after
the occurrence of the fire or other casualty, then this Agreement shall
forthwith terminate. The fixed or basic rent herein reserved shall abate during
the time that the Premises is untenantable. In the event of insubstantial damage
to the Premises by fire or other casualty, said Premises shall be promptly
restored or repaired by Lessor, and a just and proportionate part of the fixed
or basic rent herein specified shall abate until said Premises have been fully
restored or repaired.

 

 

 

22.        Right to Cure Defaults:    If either party shall fail to comply fully
with any of its obligations under this Lease (including, without limitation, its
obligations to make repairs, maintain various policies of insurance, comply with
all laws, ordinances and regulations and pay all bills for utilities), then the
non-defaulting party shall give notice to the defaulting party regarding the
nature and extent of such default and the defaulting party will have sixty (60)
days to cure any such default, and if it fails to cure such default, then the
non-defaulting party shall have the right, at its option, to cure such breach at
the other party’s expense. Each party agrees to reimburse the other (as
additional rental or otherwise) for all costs and expenses incurred as a result
thereof together with interest thereon promptly upon demand.

 

23.        Severability:     Wherever possible each provision of this Lease
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Lease shall be prohibited by or
invalid under applicable law, such provisions shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Lease.

 

24.        Relationships of Parties:    Nothing contained in this Agreement
shall be construed to create the relationship of principal and agent,
partnership, joint venture or any other relationship between the parties hereto
other than the relationship of Lessor and Lessee.

 

25.        Notices:    Every notice, approval, consent or other communication
authorized or required by this Agreement shall not be effective unless served in
writing and sent by United States registered or certified mail, return receipt
requested, directed, if to Lessee to the Premises, and if to Lessor at the
address listed on page 1 hereof or such other address as either party may
designate by notice from time to time.

 

26.        Waiver:    One or more waivers of any covenant or condition by either
party hereto shall not be construed as a wavier of a subsequent breach of the
same or any other covenant or condition, and the consent or approval by one
party to or of any act by the other party requiring the consenting party’s
consent or approval shall not be construed to waive or render unnecessary the
consenting party ’s consent or approval to or of any subsequent similar act.

 

27.        Entire Agreement:    No oral statement or prior written matter shall
have any force or effect all of which shall merge herein and be superseded
hereby. No waiver of any provision of this Agreement shall be effective unless
in writing, signed by the waiving party. The parties agree that they are not
relying on any representations or agreements other than those contained in this
Agreement. This Agreement shall not be modified except by a writing subscribed
by all parties, nor may this Agreement be canceled by either party except with
the written consent of the other, unless otherwise specifically provided herein.
The invalidity or unenforceability of any provisions of this Agreement shall not
affect or impair any other provision. All captions herein are solely for
convenience and shall not be given any legal effect.

 

 

 

Except as otherwise provided in this Agreement, the covenants, conditions and
agreements contained in this Agreement shall bind and inure to the benefit of
Lessor and Lessee and their respective successors and permitted assigns.

 

IN WITNESS WHEREOF, the parties hereby set their hands and seals.

 

LESSOR:   LESSEE:               VILLAGE OF BURR RIDGE   NANOPHASE TECHNOLOGIES
CORORATION   Cook and DuPage Counties, Illinois   DuPage County, Illinois      
         (Signature) [ex1051006.jpg]   (Signature) [ex1051008.jpg]    President
    President               ATTEST:     ATTEST:                  (Signature)
[ex1051007.jpg]   (Signature) [ex1051009.jpg]   Clerk     Secretary            
    Dated: 3-14-17   Dated: 2/27/17