**Exhibit 10.1**

 

**LEASE**

 

THIS INDENTURE OF LEASEmade this 21st day of September, 2000, by and between the heirs to the DanielHarper Estate, as set forth hereunder, hereinafter referred to as “Lessors”,and Mypodiamond Inc., a corporation of the State of Delaware, with itsprincipal offices at 200 North Repauno Avenue, Gibbstown, New Jersey 08027,hereinafter referred to as “Mypodiamond”.

 

WITNESSETH:

 

Lessors do herebylet and lease unto Mypodiamond and Mypodiamond does hereby hire and take fromLessors:

 

ALL THAT CERTAIN TRACT OR PARCEL OF LAND situate inthe Township of Dunbar, County of Fayette and Commonwealth of Pennsylvania,containing 322 acres, more or less, together with the former Blue Stone Minelocated thereon; said tract is as shown on surveys attached hereto, made a parthereof and marked Exhibits “A” and “B”.

 

SUBJECT TO:

 

(1)                                  Existingoil and gas leases on the Leased Premises, under which Lessees are notpermitted to drill within the area actually occupied by the said former BlueStone Mine; and

 

(2)                                  Reservingto the Lessors the exclusive right to enter upon the Leased Premises to cut andremove timber. The Lessee is specifically prohibited from cutting or allowingthe cutting of any timber unless necessary to their operations on the premises.

 

TO HAVE AND TO HOLD the Leased Premises untoMypodiamond for an initial term of five (5) years, commencing on the 16th dayof December, 2000 and ending at midnight on the 15th day of December, 2005;provided, however, that this Lease may be extended at Mypodiamond’s option asfollows: for a first additional term of five (5) years from December 16, 2005to December 15, 2010; for a second additional five (5) year term from December16, 2010 to 

 

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December 15, 2015; for a third additional five (5) year term fromDecember 16, 2015 to December 15, 2020; for a fourth additional five (5) yearterm from December 16, 2020 to December 15, 2025; and for a fifth four****(4) year term from December 16, 2025 to December 15, 2029,upon Mypodiamond giving written notice for each additional five (5) yearextension at least one hundred twenty (120) days prior to the expiration of theinitial period or any extension period.

 

In addition, the parties agree that this Leasereplaces the existing master lease between DuPont and the Daniel Harper Heirs. Theexisting master lease is hereby terminated as of the date of this Lease. TheParties agree that paragraphs 5 and 11 of the existing master lease shallremain in effect as to any losses, costs, damages, claims or liability prior tothe execution of this lease.

 

This Lease is made subject to the following terms andconditions, which the parties hereto do hereby covenant and agree to keep andperform:

 

1.             During the first year of the initial period (December16, 2000 to December 15, 2001), Mypodiamond shall pay to Lessors as rental forthe Leased Premises the sum of Seventy Five Thousand Dollars and 00/100($75,000.00) to be paid in twelve equal monthly installments commencing onDecember 16, 2000 and continuing thereafter as provided herein. This rentalrate is referred to as the “Annual Rental” and is subject to increase asprovided herein. Rental for every year thereafter during the term of this Leaseshall be in an amount determined with the following:

 

(1)           Asused in this Section:

 

(a)           “Index”shall mean the “Consumer Price Index for Urban Wage Earners and ClericalWorkers” “(1967=100)” specified for “All Items”, relating to PA-NJ-DE-MD andissued by the Bureau of Labor Statistics of the United States Department ofLabor. In the event the Index shall hereafter be converted to a differentstandard reference base or otherwise revised, the determination of thePercentage Increase (defined below) shall be made with the use of suchconversion factor, formula or table for converting the Index as may bepublished by the Bureau of Labor Statistics or, if said Bureau shall notpublish the same, then with the use of such conversion factor, formula or tableas may be published by Prentice Hall, Inc., or, failing such 

 

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publication, by any other nationally recognized publisher of similarstatistical information. In the event the Index shall cease to be published,then there shall be substituted for the Index such other index as Lessors andMypodiamond shall agree upon, and, if they are unable to agree within ninety(90) days after the Index ceases to be published, such matter shall bedetermined in Philadelphia by arbitration in accordance with the Rules of theAmerican Arbitration Association.

 

(b) “New Index” shall mean the index derived for theNovember immediately preceeding each Anniversary Date.

 

(c) “Current Index” shall mean the index derived forthe November of the year immediately preceeding the year in which a New Indexis derived.

 

(d) “Anniversary Date” shall mean December 16, 2001and each successive December 16th during the lease or any extensionsthereof.

 

(e) “Percentage Increase” shall mean the percentageequal to the fraction, the numerator of which shall be the New Index less theCurrent Index, and the denominator of which shall be the Current Index.

 

(2) The Annual Rentalshall be increased on each Anniversary Date by the Percentage increase, if any,as provided above. It is the intention of the parties that increases in theBase Rate shall be compounded as indicated in Section 1.

 

Twenty percent (20%) of the rent shall be payable byMypodiamond directly to the successors of Anna C. Harper for her proportionateshare with the balance of the rent to be payable to Edmund C. Harper or hissuccessor, as agent for the other Lessors, less that percentage representingthe percentage ownership of any non-subscribing cotenants of the LeasedPremises. Edmund C. Harper or his successor will be responsible for disbursingsaid rent to said other Lessors. Mypodiamond assumes no liability for suchdisbursement by Edmund C. Harper or his successor, and said other Lessorsrelease Mypodiamond from liability for rental payments once rent is paid byMypodiamond to Edmund C. Harper or his successor under the terms set forthherein.

 

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2.             Lessorswarrant that they possess a fee simple ownership interest in the LeasedPremises and that shall Warrant and Defend Lessee’s peaceful and quietoccupation against all parties.

 

3.             Lessee shall use the Leased Premises for its claddingand diamond operations, which shall be conducted in accordance with allapplicable Federal, State and Local laws and regulations and shall secure allnecessary permits and licenses at its own expense.

 

4.             Mypodiamondshall have the right to construct, operate and maintain on the Leased Premisesany and all improvements deemed necessary or convenient in connection with itsoperations and shall have the further right at any time to remove anysubstantial buildings or other structures of like nature that it may haveplaced thereon within ninety (90) days of expiration of this Lease within theterms set forth herein. Facilities, such as protective fencing and permanentlyinstalled gates, electrical wiring and air-flow baffle walls are to be left inplace at the termination of this Lease or removed, at Lessors’ option, byMypodiamond at Mypodiamond’s  expense.

 

5.             Lesseeshall indemnify and hold Lessors harmless from and against any loss, costs,damages, claims and/or liability, including reasonable attorney fees, onaccount of any death or injury to any persons or damage to any property(including surrounding properties and also damage to the former Blue Stone Minewhich is situated on the Leased Premises) except reasonable wear and tear tothe Leased Premises in connection with the Lessee’s lawful use of saidpremises. Lessee further agrees to indemnify and hold Lessors harmless from andagainst any loss, costs, damages, claims and/or liability, including reasonableattorney fees, in connection with any environmental contamination or compliancewith environmental regulations, past or present.

 

6.             Inthe event Mypodiamond’s operations within the Blue Stone Mine result innecessary removal of rocks from the mine, Mypodiamond shall pile said rocks soremoved in a nearby place to be designated by Lessors for disposal by Lessors. Mypodiamondis to have no right to the rocks thus removed nor to any proceeds therefrom. Lessorsshall have the right of 

 

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ingress and egress in order to remove such rocks with written notice toMypodiamond.

 

7.             Mypodiamondshall pay any increase in the real estate taxes (including school taxes) leviedagainst the Leased Premises over and above the amount of real estate taxes forthe year 1985 (“Base Year under the existing lease”), together with anyincrease in said taxes levied on account of improvements placed on the LeasedPremises by Mypodiamond. Such payment shall be made to Edmund C. Harper or hissuccessor, who, on behalf of the Lessors, shall pay the real estate taxeslevied against the Leased Premises for so long as this Lease shall remain ineffect. It is understood that, since this Lease is not on a calendar year basis,Mypodiamond’s payment of any increase in real estate taxes levied against theLeased Premises over and above the taxes for the Base Year will be made on apro rata basis for the last year that this Lease remains in effect.

 

8.             Mypodiamond shall have no right to sublet all or anyportion of the Leased Premises nor to assign this Lease, without the priorwritten consent of Edmund C. Harper or Lessor’s subsequent designee(s),provided, however, that no consent shall be required for Lessor to sublet allor a portion of the Leased Premises to any of the following parties: (1)Dynamic Materials Corporation (“DMC”) or (2) Ametek, Inc. Not withstandinganything to the contrary in this paragraph, Mypodiamond shall have the right toassign or sublet all or any portion of the Leased Premises including, withoutlimitation, the right to assign this Lease or sublet all or a portion of theLeased Premises to any subsequent purchaser of DMC’s cladding business with theconsent of the Lessors, which the Lessors agree shall not be unreasonablywithheld.

 

9.             Lesseeshall have the right to terminate this Lease on December 15, 2005 or at anytime thereafter upon giving written notice to Edmund C. Harper at 1823 MartinAvenue, Fremont, OH 43420 (or at any other address that may be supplied inwriting to Mypodiamond from time to time) to that effect at least twelve (12)months prior to the effective date of termination.****Ifhowever, Lessee terminates this lease at any time prior to December 15, 2025,then Lessee shall pay to Lessors a sum equal to five (5) times the annualrental in effect at the time of termination, in sixty equal monthlyinstallments commencing on the fifteenth day of the 

 

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month immediately following termination. If Mypodiamond provides suchtermination notice to Lessor, then Lessor shall provide notice of suchtermination notice to all permitted Sublessees, if any, and any permittedsublessees shall have the option, within fifteen (15) days of receiving such noticefrom Lessors, to assume all of Mypodiamond’s rights and obligations under thisLease.

 

10.           Lessoragrees that should Mypodiamond either: (1) terminate or notify Lessor of itsintention to terminate this Lease prior to the end of the initial term (endingDecember 15, 2005) or any subsequent extension period as required hereunder,(2) fail to provide advance written notice to Lessor of its intention to extendthe initial period or any extension period or (3) fails to make the rentalpayments described in Section 1 for a continuous 3 month period and the Lease,for whatever reason, is not assigned by Mypodiamond to the Sublessee, then theLessor shall notify Mypodiamond of such condition and Mypodiamond will have 10days to remedy the condition. If Mypodiamond does not remedy the condition,then Sublessee shall have the option, within 15 days of receiving notice fromthe Lessor of Mypodiamond’s action, to assume all of Mypodiamond’s rights andobligations under the Lease as if none of the foregoing events had occurred.

 

11.           Uponthe expiration or prior termination of this Lease, Mypodiamond shall surrenderpossession of the Leased Premises to Lessors with the former Blue Stone Minesituate thereon to be in substantially the same condition as it was on the datehereof.

 

12.           ThisLease shall inure to the benefit of and be binding upon the parties hereto,their heirs, executors, administrators, successors and assigns, and may beexecuted in counterparts.

 

13.           IfMypodiamond negotiates directly or indirectly with any or all nonsubscribingcotenants of the Leased Premises and Mypodiamond increases remuneration to themso that such is proportionally greater (relative to their ownershippercentage), than that given the subscribing cotenants (including those signingthrough a power of attorney) in order to secure their approval of a lease oftheir cotenancy then the rent hereunder shall increase so that all of thesubscribing 

 

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cotenants hereto will receive the same proportionally increased rent.

 

IN WITNESS WHEREOF, the parties hereto have executedthis Indenture of Lease on this the day and year first above written.

 
| WITNESS:                    |   | MYPODIAMOND INC. |
|-----------------------------|--------|------------------|
|                        |   |             |
|                        |   |             |
|                        |   | By:              |   |   |
|                        |   |             |
|                        |   |             |
| LESSORS:                    |   |             |
|                        |   |             |
|                        |   |             |
| Alice Stile                 |   |             |
|                        |   |             |
|                        |   |             |
| Anne H. Liberati            |   |             |
|                        |   |             |
|                        |   |             |
| Beatrice Kostelac           |   |             |
|                        |   |             |
|                        |   |             |
| Bruce D. Kushner            |   |             |
|                        |   |             |
|                        |   |             |
| Carol E. Eckman             |   |             |
|                        |   |             |
|                        |   |             |
| Estate of Carol H. Collins  |   |             |
|                        |   |             |
|                        |   |             |
| Charles & Elaine Hughes |   |             |
|                        |   |             |
|                        |   |             |
| Daniel B. Haggerty          |   |             |
|                        |   |             |
|                        |   |             |
| Dolores Harper              |   |             |

 

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|                       |   |   |
|----------------------------|--------|--------|
| Donald F. Smith            |   |   |
|                       |   |   |
|                       |   |   |
| Douglas C. Kusher          |   |   |
|                       |   |   |
|                       |   |   |
| Edwin Robbins              |   |   |
|                       |   |   |
|                       |   |   |   |
| Estate of Andrew E. Reilly |   | By     | Michael Reilly |   |
|                       |   |   |
|                       |   |   |
| Emma Jean Moeller          |   |   |
|                       |   |   |
|                       |   |   |
| Marnie Real                |   |   |
|                       |   |   |
|                       |   |   |
| John C. Harper             |   |   |
|                       |   |   |
|                       |   |   |
| Evenly Bunting             |   |   |
|                       |   |   |
|                       |   |   |
| Frank G. Harper            |   |   |
|                       |   |   |
|                       |   |   |
| Jack W. Snyder             |   |   |
|                       |   |   |
|                       |   |   |
| Mary M. Reilly             |   |   |
|                            |        |        |  |  |

 

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|               |   |   |
|--------------------|--------|--------|
| James T. Harper    |   |   |
|               |   |   |
|               |   |   |
| James Welch        |   |   |
|               |   |   |
|               |   |   |
| John D. Reilly     |   |   |
|               |   |   |
|               |   |   |
| Dr. John J. Harper |   |   |
|               |   |   |
|               |   |   |
| Joseph R. Dominac  |   |   |
|               |   |   |
|               |   |   |
| Josephine Petty    |   |   |
|               |   |   |
|               |   |   |
| Karen Powell       |   |   |
|               |   |   |
|               |   |   |
| Kathleen M. Reilly |   |   |
|               |   |   |
|               |   |   |
| Lula E. Keffer     |   |   |
|               |   |   |
|               |   |   |
| Lynn F. Davis      |   |   |
|               |   |   |
|               |   |   |
| Madeline Hampton   |   |   |
|               |   |   |
|               |   |   |
| Marianne Spiker    |   |   |

 

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|               |   |                            |
|--------------------|--------|---------------------------------|
| Marjorie Carlton   |   |                            |
|               |   |                            |
|               |   |                            |
| Linda Lacey Jones  |   |                            |
|               |   |                            |
|               |   |                            |
| Charlene E. Harper |   |                            |
|               |   |                            |
|               |   |                            |
| Reid K. Smith      |   |                            |
|               |   |                            |
|               |   |                            |
| Robert B. Lynch    |   |                            |
|               |   |                            |
|               |   |                            |
| William R. Snyder  |   |                            |
|               |   |                            |
|               |   |                            |
| William S. Harper  |   |                            |
|               |   |                            |
|               |   |                            |
| William W. Harper  |   |                            |
|               |   |                            |
|               |   |                            |
| Wilma Jean Stewart |   |                            |
|               |   |                            |
|               |   |                            |   |
| Lila Lynch         |   | By Eleanora Pike, Administrator |
|               |   |                            |
|               |   |                            |
| David D. Lacey     |   |                            |
|               |   |                            |
|               |   |                            |
| William R. Lacey   |   |                            |

 

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|                     |   |   |
|--------------------------|--------|--------|
| Edmund C. Harper         |   |   |
|                     |   |   |
|                     |   |   |
| Linda Carlton Allen      |   |   |
|                     |   |   |
|                     |   |   |
| Estate of Anna C. Harper |   |   |
|                     |   |   |
|                     |   |   |
| James Edward Carlton     |   |   |

 

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