Document:

Exhibit
10.34

 

AMENDED AND
RESTATED

 

BUILD TO SUIT

 

INDUSTRIAL
LEASE AGREEMENT

 

THIS AMENDED AND RESTATED BUILD TO SUIT INDUSTRIAL LEASE AGREEMENT (the
“Lease”) is made as of the 17th day of March, 2000, between INDUSTRIAL
REALTY PARTNERS, LLC, a Tennessee limited liability company (the “Lessor”),
as Lessor, and IMPERIAL GROUP, L.P., a Delaware limited partnership (the “Lessee”),
as lessee.

 

WHEREAS CHI NU DEAL I, L.L.C., a Tennessee limited liability company,
and Lessee entered into a certain Build to Suit Industrial Lease Agreement
dated as of the 29th day of April, 1999 and such Lease Agreement was
assigned to Lessor by assignment dated as of the July 2, 1999;

 

WHEREAS, the Lessor and Lessee hereby desire to amend and restate such
Lease Agreement as set forth herein;

 

WHEREAS, CHFAB Management, Inc. 
(formerly Imperial Fabricating Company of Tennessee, Inc.), a Tennessee
corporation (the “Existing Plant No, 1 Lessor”) and Lessee entered into
that certain Industrial Lease dated as of April 29, 1999 for the building
and land located at 3301 Highway 76, New Deal, Tennessee (the “Existing
Plant No. 1 Lease”);

 

WHEREAS, CHFAB Management, Inc. 
(formerly Imperial Fabricating Company of Tennessee, Inc.), a Tennessee
corporation (the “Existing Plant No. 2 Lessor”) and Lessee entered into
that certain Industrial Lease dated as April 29, 1999 for the building and
land located at 3278 Highway 76, New Deal, Tennessee (the “Existing Plant
No. 2 Lease”);

 

WHEREAS, the Existing Plant No. 1 Lessor and the Existing Plant No. 2
Lessor are hereinafter collectively referred to as the “Existing Plant
Lessors”; (the “Existing Plant No. 1 Lease and the Existing Plant No. 2
Lease are hereinafter collectively referred to as the “Existing Plant Leases”);
(and the buildings and land leased pursuant to the Existing Plant Leases are
hereinafter collectively referred to as the “Existing Plants”);

 

WHEREAS, the Lessor has identified and acquired a new site in Tennessee
(the “Kirby Road Site”) for the purpose of constructing thereon a new manufacturing
facility containing approximately 230,000 square feet to be used by Lessee for
the Permitted Use herein below defined (the “New Facility”), which Kirby
Road Site and New Facility will be leased to Lessee pursuant to this Lease in
substitution for the Existing Plants, all as more fully set forth herein below;

 

WHEREAS, Imperial Fabricating Company of Tennessee, Inc., a Tennessee
corporation (“IFC”), Fleet Design, Inc., a Tennessee corporation (“Fleet”,
and together with IFC, the “Companies”), Imperial Group, Inc., a
Tennessee corporation (“Group”), Fred D. Culbreath and Joseph A. Hicks,
the shareholder of Group (the “Imperial Shareholders”, and together with
the Companies and Group, the “Sellers”), entered into a certain asset
purchase agreement (the “Asset Purchase Agreement”) dated March 22,
1999 with Transportation Technologies Industries, Inc. (formerly Johnstown
America Industries, Inc.), a Delaware corporation (“Johnstown”) and
Lessee

 

 

(Johnstown and Lessee, collectively, “Buyer”),
and pursuant to such asset purchase, all of the parties thereto, together with
Lessor, have executed a Tennessee Plant Escrow Agreement, pursuant to which
Sellers have segregated certain funds in the amount of $5,000,000.00 which are
to be held and disbursed in accordance with the Tennessee Plant Escrow
Agreement (the “Tennessee Plant Escrow”), a copy of which is attached
hereto and made part hereof as Exhibit A;

 

NOW, THEREFORE, for and in consideration of Ten and no/100 Dollars, and
other good and valuable consideration, the receipt and sufficiency of which are
acknowledged, the parties hereto agree as follows:

 

1.             INCORPORATION
OF RECITALS.

 

The recitations set forth above are incorporated herein as if set forth
herein verbatim.

 

2.             ACQUISITION
OF KIRBY ROAD SITE.

 

Lessor has acquired the Kirby Road Site with the approval of the Lessee
and has begun construction of the New Facility in accordance with Plans and
Specifications dated the 27th day of October, 1999 (herein the “Final Plans and
Specifications”) all as approved by the Lessee.

 

In the event of the death of both of the Imperial Shareholders during
either the Process or the Completion of Lessor’s Improvements in accordance
with the terms and provisions governing such completion as herein below set
forth, then and in such event, upon forty five (45) days prior written notice
from Lessee to Lessor (and, provided, however, that Lessor has not within the
aforesaid forty five (45) day period found a successor individual reasonably
acceptable to continue to administer the Process or completion of Lessor’s
Improvements, as applicable), Lessee shall have the right to designate three
proposed representatives as it in its reasonable discretion deems appropriate
to administer the completion of the Process or Lessor’s Improvements, as
applicable, and Lessor shall promptly select one of the three individuals as
the selected representative to continue to administer the completion of the
Process or Lessor’s improvements, as applicable.

 

3.             DEMISE
OF LAND AND BUILDINGS.

 

Effective as of August 25, 1999, Lessor does hereby demise and let
to Lessee, and Lessee shall be deemed to lease from Lessor, the Kirby Road Site
(hereinafter referred to as the “Land”), together with all improvement
located on and to be constructed thereon (the “Improvements”) (including
but not limited to Lessor’s Improvements, as defined herein below), and all
other improvements, machinery, equipment and other property, real, personal or
mixed (except Lessee’s trade fixtures) actually or constructively attached to
said Land or intended to be used with the operation of said Improvements,
together with all additions, alterations and replacements thereof (hereinafter
collectively referred to as the “Building”).  The Land and Building which exist from time
to time are hereinafter referred to as the “Premises”.  The legal description of the Land is attached
hereto as Exhibit A-1.

 

4.             TERM.

 

A.            Initial Term.  Upon
Substantial Completion of Lessor’s Improvements, Lessee shall thereafter use
commercially reasonable efforts to relocate from the Existing Plants to the
Premises within a commercially reasonable time such majority of Lessee’s
machinery,

 

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equipment and other trade
fixtures as will enable Lessee to commence operations at the Premises of the
business operations previously conducted at the Existing Plants.  Upon Substantial Completion, the obligations
of the Lessee under this Lease, except for the payment of the Rent (as herein
defined) shall begin.  The Initial Term
of this Lease shall begin upon the date of Substantial Completion and shall end
Fifteen (15) years from the date of Commencement of Operations as set forth in
Exhibit A-2 attached hereto (referred to herein as the “Commencement Date”).  The initial term of the Lease, as set forth
above, is sometimes hereinafter referred to as the “Initial Term”.  Except as set forth on Exhibit A-2, Lessee
shall not be liable to Lessor for the payment of Base Rent, Additional Rent (as
such terms are hereinafter defined) or the payment of any other obligation to
be paid by Lessee until the Commencement Date.

 

B.            Options
To Renew.  Lessee shall have the
right, subject to the provisions hereinafter provided, to extend the term of
this Lease for two (2) periods of five (5) years each (each, a “Renewal Term”),
on the terms and provisions of this Subparagraph provided:

 

(i)                                     this Lease is in full force and
effect and Lessee is not in default in the performance of any of the terms,
covenants and conditions herein contained, in respect to which notice of
default has been given hereunder which has not been or is not being remedied in
the time permitted in this Lease, at the time of exercise of the right of
renewal and at the time set for commencement of the Renewal Term, but Lessor
shall have the right at its sole discretion to waive the non-default conditions
herein;

 

(ii)                                  that each such Renewal Term shall be
upon the same terms, covenants and conditions as provided in this Lease;
provided, however, annual Base Rent for the Premises for the particular Renewal
Term shall be at the then current Fair Market Rental Rate (as determined in
accordance with paragraph (iv) below); provided further, however, the Base Rent
for each such Renewal Term shall in no event be less than the Base Rent rate
(exclusive of temporary abatement) payable by Lessee immediately prior to
commencement of each such Renewal Term. 
Upon determination of the Base Rent rate for each such Renewal Term, the
parties shall execute an amendment to this Lease to establish and evidence such
Base Rent rate;

 

(iii)                               Lessee shall exercise its right to
each of the Renewal Terms provided herein, if at all, by notifying Lessor in
writing of its election to exercise the right to renew the terms of this Lease
for the then applicable Renewal Term at least one hundred eighty (180) days
prior to the commencement date of the then applicable Renewal Term;

 

(iv)                              Lessee’s Base Rent during each
Renewal Term shall be an amount equal to the Fair Market Rental applicable to
each Renewal Term, determined as hereinafter set forth.  Within ninety (90) days after Lessor receives
Lessee’s notice of election to renew (“Negotiation Period”), Lessor
shall, by written notice to Lessee, deliver Lessor’s

 

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determination
of “Fair Market Rental Rate” for the Leased Premises.  The term “Fair Market Rental Rate” as
used herein shall mean an amount equivalent to the then current fair market
rate of rentals received per month in the general market area in which the
Leased Premises are located for a similar period of time and for buildings of
comparable characteristics, including but not limited to, comparable lease
terms, age, condition and classification and for a similar use of equal quality
and with a location providing similar accessibility to the public.  In the event that Lessee does not accept
Lessor’s determination of the Fair Market Rental for the Renewal Term, Lessee
may either elect to withdraw its renewal notice or elect to have Lessor and
Lessee each, within ten (10) days after the expiration of the Negotiation
Period, select an appraiser, each of whom shall be an MAI-certified real estate
appraiser with at least 5 years’ experience in the commercial leasing market
who shall determine the Fair Market Rental for the Leased Premises in
accordance with this subsection.  The
appraisers shall be instructed to complete the appraisal procedure
independently and to submit their written determinations to Lessor and Lessee
within thirty (30) days after their appointment.

 

In the event that the higher determination of the Fair Market Rental
submitted by one of the appraisers is equal to or less than 110% of the
determination of the Fair Market Rental submitted by the other appraiser, the
Fair Market Rental shall be the average of such determinations.  If the determination of the Fair Market
Rental submitted by one of the appraisers is greater than 110% of the
determination of the Fair Market Rental submitted by the other appraiser, the
appraisers shall, within ten (10) days of notice from Lessor or Lessee, appoint
a third appraiser with similar qualifications to make a determination of the
Fair Market Rental.  In the event that
the two (2) appraisers cannot agree as to the selection of the third appraiser
within five (5) days after Lessor or Lessee has requested that they do so,
either party may request that the local Board of Realtors (or any successor
organization) appoint the third appraiser, which appointment shall be made
within ten (10) days after Lessor or Lessee have made such a request.  The third appraiser shall be instructed to
select the appraisal of either Lessor or Lessee which, in such appraiser’s
opinion, most accurately reflects Fair Market Rental and to submit a written
determination thereof to Lessor and Lessee within thirty (30) days after such
appraiser’s appointment, which determination shall be final and conclusive of
Fair Market Rental.  Lessor and Lessee
shall each bear the costs of their respective appraisers.  The expenses of the third appraiser shall be
borne one-half (1⁄2) by Lessor and one-half (1⁄2) by Lessee; and

 

(v)                                 Lessor and Lessee shall promptly
execute an amendment confirming the terms and provisions of the extension as
outlined herein.

 

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5.             RENT:

 

A.            Base Rent.  In consideration of leasing the Premises and
construction of the Lessor’s Improvements, Lessee covenants to pay as and for
base rent (the “Base Rent”), subject to adjustment as set forth below,
an amount per annum equal to the product obtained by multiplying the applicable
Rental Rate by the Rentable Square Feet (as defined herein) of Lessor’s
Improvements (as defined herein below). 
The applicable Rental Rate shall be as follows:

 

(i)                                     For the period prior to the
Commencement Date as set forth on Exhibit A-2;

 

(ii)                                  For the first year of the Initial
Term, beginning with the Commencement Date, the applicable Rental Rate shall be
$2.25;

 

(iii)                               For the second year of the Initial
Term, the applicable Rental Rate shall be $2.50;

 

(iv)                              For each subsequent year of the
Initial Term, subject to the adjustments set forth below the applicable Rental
Rate shall be $3.00.

 

All Base Rent shall be payable in equal monthly installments in advance
on the first day of each calendar month during the Term hereof, except that
Base Rent for any partial calendar month shall be prorated based on the number
of days in such month, and Base Rent for the first month of the Term shall be
paid on the Commencement Date.  The Rentable
Square Feet of the Lessor’s Improvements is approximate and is subject to
measurement promptly following the Commencement Date at which time Base Rent
and other charges shall be adjusted to reflect such measurement (it being
understood that the Base Rent set forth in this Paragraph 5 is based on dollars
per square foot).  In the event of a
dispute as to the rentable square feet of the Lessor’s Improvements and the
amount of Base Rent due from Lessee under the provisions of this Lease, the
number of rentable square feet (“Rentable Square Feet”) shall be
determined by a qualified engineering firm or architect mutually acceptable to
Lessor and Lessee applying the Building Owners and Managers Association (“BOMA”)
standards for similar properties (or if a BOMA standard is not available,
another nationally recognized standard selected by Lessee).  The cost of such determination shall be borne
equally by the parties; provided, however, in no event shall the Rentable
Square Feet exceed that which Lessee approved on the Final Plans and
Specifications together with any Change Orders (as such terms are herein
defined) for Lessor’s Improvements. 
Pending resolution of such dispute, all monies billed by Lessor to
Lessee shall be paid based upon the Rentable Square Feet contemplated by such
Final Plans and Specifications subject to reimbursement or credit after such
final determination has been made.

 

B.            Adjustments to Base Rent.  On the first day of the sixth year of the
Initial Term and on the first day of each subsequent year of the Initial Term,
the Base Rent shall be adjusted by the lesser of (y) the cumulative increase or
decrease from the Commencement Date to the Sixth (6th) Anniversary and each
subsequent anniversary date, as applicable, of the Commencement Date, as
relevant, in the Consumer Price Index for the City of New York, Urban Wage
Earners and Clerical Workers, all items (1982-84 = 100) as published by the
Bureau of Labor statistics, United States Department of Labor, or any
reasonably similar index to the extent the foregoing index at any time ceases
to be published or readily available (the “CPI Changes”); or (z) one
hundred ten percent (110%) of the prior year’s Base Rent.

 

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6.             LESSOR’S
IMPROVEMENTS:

 

Lessor agrees to cause to be furnished at Lessor’s sole cost and
expense all of the material, labor, and equipment for the construction on the
Land of the improvements in accordance with the Final Plans and Specifications
dated October 27, 1999, with such change orders as approved by Lessor and
Lessee (herein the “Lessor’s Improvements”), and shall be referred to as
the “Lessor’s Improvements”.  In
addition, Lessor has entered into a Design/Build Agreement dated the 30th
day of November, 1999 with Dooley & Mack Constructors, Inc.  (herein the “Design/Builder”), Lessor
shall be responsible for:

 

(i)            supervising
the Design/Builder during construction; and

 

(ii)                                  submitting
all of the Monthly Draw Documentation required pursuant to the Tennessee Plant
Escrow.

 

Lessor shall cause Lessor’s Improvements to be constructed in a good
and workmanlike manner in accordance with the Final Plans and Specifications
and Lessor agrees to cause the construction thereof to be completed in
accordance with all applicable restrictive covenants or similar agreements to which
the Premises are subject and in accordance with the applicable building and
fire code as it is presently interpreted and enforced by the governmental
bodies having jurisdiction thereof. 
Lessor shall cause to be obtained, at its expense, all building permits
required for the construction of Lessor’s Improvements.  In the event Lessee desires changes in the
Lessor’s Improvements, Lessee shall notify Lessor of such request and follow
the procedures set forth in Subparagraph C hereinafter.  Lessor shall incur the costs of any Change
Order to the extent the aggregate cost of acquisition of the Land and
construction of Lessor’s Improvements following such change order is equal to
or less than Five Million and 00/100 Dollars ($5,000,000.00).  The cost of any Change Order requested by
Lessee resulting in a project cost in excess of such amount shall be allocated
and paid by Lessee.  Lessee shall pay to
Lessor all increased costs or direct (and not consequential) damages actually
incurred by Lessor attributable to Lessee Delays (including those Lessee Delays
attributable to changes ordered in the work by Lessee).  For purposes of this paragraph, “Lessee
Delays” shall mean any one or more delays caused by any act or neglect of
Lessee, or those acting for or under Lessee, or by any separate contractor
employed by Lessee or by changes ordered in the work by Lessee, or by Lessee’s
failure to respond within ten (10) business days to a request by Lessor to
specify details, layouts, selections or other information required by Lessor in
connection with Lessor’s causing the construction of Lessor’s Improvements or
the failure of Lessee to take possession of or to occupy the Premises or take
other actions on or after the date Lessor’s Improvements are substantially
complete and ready for occupancy by Lessee, the result of which is to delay
issuance of a certificate of occupancy for the Premises.  Lessor shall notify Lessee of any Lessee
Delay within five (5) business days after the occurrence of such event.  In the event Lessee delivers a timely and
complete response to a Lessor request by providing the information so requested
within the five (5) business day period specified in this Lease, no Lessee
Delay shall occur as a result of such request by Lessor.

 

A.            Delivery Date; Excused Delay; Substantial
Competition.  (a) Lessor
shall cause the Contractor to diligently proceed with the construction of the
Lessor’s Improvements and substantially complete the same (as defined in this
Paragraph) and on or before June 1, 2000 (the “Delivery Date”);
provided, however, if Contractor is delayed at any time in the progress of
constructing the Lessor’s improvements by any Lessee Delay or by any labor
disputes, casualties,

 

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acts of God or the public enemy, governmental embargo restrictions,
inability to obtain building materials at reasonable costs, action or
non-action of public utilities, or of local, state or federal governments
affecting the work, or other causes beyond Contractor’s reasonable control
(such delays are each hereinafter referred to as an “Excused Delay”),
then the Delivery Date shall be extended for the additional time caused by such
Excused Delay.  The parties agree that
shortages of fuel or labor shall not be Excused Delays.  Lessor shall cause Contractor to notify
Lessee of any conditions or circumstances which constitute an Excused Delay
within five (5) days after the occurrence of such Excused Delay, and shall
cause to be specified as soon as possible thereafter the number of days delay
resulting from such conditions or circumstances (the “Delay  Period”).  In the case of a continuing cause of delay,
only one notice by Contractor shall be required, except that in the event the
cause for delay is weather related, Lessor shall cause Contractor to give
Lessee updates at reasonable times.  In
the event Lessor fails to cause the Contractor to substantially complete the
Lessor’s Improvements (other than the weather sensitive work as described
above) by the Delivery Date (subject to Extension for an Excused Delay equal to
the number of days in any Delay Period), then in lieu of all other rights and
remedies available to it under law and equity, Lessee may, upon written notice
to Lessor delivered within ten (10) business days after such failure to
deliver, elect to: (i) terminate the Lease whereupon the Lease shall terminate
without prejudice to either party’s rights or remedies; or (ii) to extend such
date for a period of days as agreed by Lessor and Lessee (“Extended Delivery
Date”); or (iii) draw from the Tennessee Plant Escrow for the purpose of
completing Lessor’s Improvements such portion of the Escrow Deposit as is
necessary therefor (such draws to be used solely for such purpose).  For all purposes under this Lease, the Lessor’s
Improvements shall be considered substantially completed, and the date of “Substantial
Completion” shall mean the date that the municipality having jurisdiction
thereof issues a preliminary or permanent certificate of occupancy (whichever
occurs first) permitting Lessee to occupy and use the Lessor’s Improvements
(except for weather sensitive work such as exterior painting, landscaping and
asphalt wearing course which will be completed as soon as reasonably can be
accomplished) or takes such other action as may be customary in such municipal
jurisdiction to permit occupancy and use thereof.

 

B.            Lessee’s Acceptance of Premises.  Within a period of 30 days after the
Commencement Date, Lessee shall notify Lessor, in writing, of all portions of
the Lessor’s Improvements which are incomplete and Lessor shall forthwith cause
such items to be completed, and in any event, within thirty (30) days (weather
permitting) after written notice from Lessee (and in the case of
weather-sensitive items, promptly complete same when weather permits).  If not previously delivered in order to have
Substantial Completion of Lessor’s Improvements, Lessor shall deliver a final
certificate of occupancy for Lessor’s Improvements within thirty (30) days
after Substantial Completion of the Lessor’s Improvements unless such failure
to obtain same is caused by or the result of a Lessee Delay or unless matters
required for issuance are the responsibility of Lessee.

 

C.            Change Orders.  Lessee may request changes in Lessor’s
Improvements consisting of additions, deletions or other revisions, provided
that, as set forth in the first paragraph of this Section 6, the cost of
any such Change Order requested by Lessee and resulting in a project cost in
excess of $5,000,000 shall be allocated and paid by Lessee.  In the event Lessee requests changes, Lessor
shall promptly notify Lessee of any costs associated with such changes and/or
changes in the Delivery Date.  All such
changes in Lessor’s Improvements shall be authorized by a written order to Lessor
authorizing a change in the Lessor’s Improvements.  A Change Order shall

 

7

 

be signed by Lessor and Lessee if there is an adjustment in the
Delivery Date.  The Delivery Date may be
changed only by a Change Order.

 

D.            Lessee
as Beneficiary of Contracts.  In
order for Lessee to comply with Lessee’s repair and maintenance obligations as
set forth herein below, Lessor shall cause Lessee to be named as an additional
beneficiary on all warranties and service contracts executed by Lessor or
received by Lessor during the construction of Lessor’s Improvements.

 

E.             Payment
of Relocation Costs.  Lessor
shall pay to Lessee within thirty (30) days after invoicing any documented out
of pocket expenses incurred by Lessee in disassembling moving and reassembling
equipment, personal property and trade fixtures from the Existing Plants to the
facility constructed as part of Lessor’s Improvements (collectively, the “Relocation
Costs”); provided, however in no event shall Relocation Costs include down
time at either of the Existing Plants. 
In the event Lessor fails to pay such invoices within said time period,
Lessee, in addition to any other remedy it may have at law or in equity, may withhold
the amount of such invoice from the installments of Rent next becoming due
until such invoices are paid.

 

7.             USE
OF PREMISES:

 

Lessee agrees to use and occupy the Premises as a manufacturing
facility with attendant offices and warehouses (“Permitted Use”).

 

8.             TAXES,
INSURANCE, EXPENSES:

 

Upon Substantial Completion, Lessee shall pay to Lessor, as Additional
Rent, the total real estate taxes levied on the Premises and becoming due and
payable from and after the date of Substantial Completion in each year of the
Term.  Such Additional Rent shall be
prorated to reflect the actual Term of the Lease during the first (from and
after Substantial Completion) and last Lease years.  Should the State of Tennessee or any
political subdivision thereof, or other governmental authority having jurisdiction
over the Premises, impose a tax, assessment, charge or fee or increase a then
existing tax, assessment charge or fee which Lessor shall be required to pay,
either by way of substitution for such real estate taxes, or otherwise, or
impose an income or franchise tax or tax on rents in addition to or as a
substitution for a general tax levied against the Premises, such taxes,
assessments, charges or fees shall be deemed to constitute a real estate tax
hereunder.  In the case of special taxes
or assessments which may be payable in installments, only the amount of each
installment and interest thereon paid during a calendar year shall be included
in taxes for that year.

 

Upon Substantial Completion, Lessee shall pay directly for fire, flood,
extended coverage, rent loss, umbrella, public liability and property damage
insurance on the Building in each year of the Term, all as more fully set forth
in Section 9 herein below.

 

Lessee will be responsible for all repairs to the Premises, including
roof, exterior walls, windows, doors, glass, fixtures, equipment, machinery,
appliances, sprinkler system, heating and air conditioning equipment, paving,
curbs, sidewalks, landscaping, drainage and lighting facilities, as may from
time to time be necessary, painting, caulking, lighting, sanitary control,
removal of snow, trash, rubbish, garbage and other refuse (subject to Lessor’s
obligation as set forth in Section 13 hereof).

 

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It is intended that the Additional Rent described in Subparagraph A
above shall commence as of the Commencement Date and shall be paid to Lessor
within thirty (30) days after invoice therefor together with all invoices,
documents and other backup data to Lessee as Lessee may reasonably require from
time to time to substantiate such invoice (in no event shall Lessee be required
to pay its pro rata share of real estate taxes more than ten (10) days prior to
the due date for such taxes).

 

9.             INDEMNITY
AND PUBLIC LIABILITY:

 

Lessee covenants to save Lessor harmless from all loss, liability,
cost, expense or damages that Lessor may incur or which may be claimed with
respect to any person or persons, corporation, or property on or about the
Premises or resulting from any act done or omission by or through the Lessee,
its agents, employees, invitees, or any person on the Premises by reason of
Lessee’s use.  Notwithstanding the
foregoing, Lessee shall have no obligation to save Lessor harmless from any
loss, liability, cost or expense arising from Lessor’s sole or partial
negligence.

 

Lessor covenants to save Lessee harmless from all loss, liability,
cost, expense or damages that Lessee may incur or which may be claimed with
respect to any person or persons, corporation, or property on or about the
Premises or resulting from any act done or omission by or through the Lessor,
its agents, employees, invitees, or any person on the Premises by reason of
Lessor’s ownership or use. 
Notwithstanding the foregoing, Lessor shall have no obligation to save
Lessee harmless from any loss, liability, cost or expense arising from Lessee’s
sole or partial negligence.

 

Lessee further covenants and agrees to maintain at all times, during
the Term of this Lease, comprehensive public liability insurance reasonably
satisfactory to Lessor, protecting and Indemnifying Lessor in an amount of not
less than One Million Dollars ($1,000,000), combined single limit for bodily
injury or property damage.

 

Lessee further covenants and agrees that it shall keep the Premises
insured for the benefit of Lessor in an amount equivalent to the full
replacement value thereof (excluding foundation, grading and excavation costs)
against:

 

(a)           loss or damage by fire;
and

 

(b)                                 such
other risk or risks of a similar or dissimilar nature as are now, or may in the
future be, customarily covered with respect to buildings and improvements
similar in construction, general location, use, occupancy and design to the
Building, including, but without limiting the generality of the foregoing,
windstorms, hail, explosion, vandalism, malicious mischief, civil commotion,
and such other coverage as may be deemed necessary by Lessor.

 

The insurance required to be provided by Lessee under this Lease may be
provided in the form of a blanket policy. 
Any insurance policy required to be carried by Lessee hereunder shall
name Lessor as an additional insured and provide that such policy shall not be
canceled without at least fifteen (15) days’ prior notice to Lessor.

 

During the construction of Lessor’s Improvements, Lessor covenants and
agrees to maintain at all times the following insurance: (i) Builder’s Risk
Insurance on an “all risks” basis for 100% of the insurable value of all
construction work in place or in progress from time to time, insuring the

 

9

 

Project, including materials in storage and
while in transit, against loss or damage by fire or other casualty, with
extended coverage, “X”, “C” and “U” coverage, vandalism and malicious mischief
coverage, bearing a replacement cost agreed amount endorsement; (ii)
comprehensive general liability insurance in an amount not less than
$1,000,000; and (iii) employer’s Liability Insurance.

 

During the construction of Lessor’s Improvements, Lessor agrees that
such policy or policies of insurance shall contain a waiver of subrogation
clause as to Lessee and Lessor waives, releases and discharges Lessee from all
claims or demands whatsoever which Lessor may have or acquire arising out of
damage to or destruction of the Premises or loss of use thereof occasioned by
fire or other casualty, which such claim or demand may arise because of the
negligence or fault of Lessee, its agents, employees, customers or business
invitees, or otherwise, and Lessor agrees to look to the insurance coverage only
in the event of such loss. 
Notwithstanding the foregoing, Lessee shall be obligated to pay the
rental called for hereunder in the event of damage to or destruction of the
Premises if such damage or destruction is occasioned by the negligence or fault
of Lessee, its agents or employees. 
Insurance premiums paid therein shall not be a portion of the Additional
Rent described in Article 5 hereof.

 

10.          ASSIGNMENT
AND SUBLETTING:

 

A.            Right
to Sublease and Assign.  Subject
to prior notice and consent of Lessor, which consent shall not be unreasonably
withheld, Lessee shall be free to assign, transfer or encumber this Lease and
may sublease the Premises or any part thereof without the prior written consent
of Lessor; provided, however, that, except as set forth herein below, any such
assignment, transfer, or sublease shall not release Lessee from any and all
covenants and obligations under this Lease.

 

B.            Release
of Lessee.  If Lessee desires the
consent of Lessor to an assignment or subletting, Lessee shall submit to Lessor
at least fifteen (15) days prior to the proposed effective date of the
assignment or sublease a written notice which includes:

 

(i)                                     all documentation then available
related to the proposed sublease or assignment (copies of final executed
documentation to be supplied on or before the effective date); and

 

(ii)                                  if Lessee is also requesting a
release of Lessee, sufficient information to permit Lessor to determine the
identity and character of the proposed sublessee or assignee and the financial
condition of the proposed assignee.

 

If Lessee has requested the consent of Lessor in accordance with Section 10(b)(ii),
Lessor may, nevertheless, withhold its consent to such assignment or subletting
if in the reasonable judgment of Lessor the sublessee or assignee does not have
a financial condition to perform its obligations under the proposed assignment
or sublease.  Any such withholding of
consent by Lessor pursuant to Section 10(B)(ii) shall be evidenced by
written notice delivered to Lessee within fifteen (15) days of Lessor’s receipt
of the written notice from Lessee submitted in accordance with the requirements
of Section 10(B)(ii) above.  In the
event of Lessor’s consent to assignment of the Lease pursuant to Section 10(B)(ii),
Lessee shall be released from its obligations under this Lease effective upon
the date of such assignment.

 

10

 

C.            Exempt
Changes, Assignments and Transfers. 
Notwithstanding anything contained herein to the contrary, none of the
following, or any changes, assignments, or transfers resulting from the
following, shall require Lessor’s prior written consent: (i) any transfer or
change in ownership interests to heirs or descendants arising out of death of
any owner of any ownership interests of Lessee; (ii) a transfer of stock in a
public offering of the capital stock of Lessee; (iii) the merger,
reorganization, consolidation, or amalgamation of Lessee with a third party or
the sale of all or substantially all of the stock or assets of Lessee; or (iv)
a transfer to a parent, subsidiary, or “affiliate” of Lessee.  In the event of an assignment or transfer by
Lessee of Lessee’s right, title and interest in and to this Lease upon the
occurrence of any assignment or transfer as a result of the events described in
clauses (iii) and (iv) of the preceding sentence, Lessee shall be released of its
covenants and obligations under this Lease effective upon the date of such
assignment or transfer provided such transferee or assignee joins in this Lease
by an assumption agreement in form reasonably acceptable to Lessor.  An “affiliate” shall mean any trust,
corporation, or partnership which owns or controls the majority of the
ownership interests of Lessee, either directly or indirectly through other entities.  As used herein, the phrase “ownership
interests” shall mean general partnership interests if Lessee is a partnership,
and capital stock if Lessee is a corporation.

 

D.            Mortgage
of the Leasehold Only.  Subject
to the priority of the liens on the Lessor’s interest in the Premises, at any
time and from time to time during the Term of this Lease, Lessee may assign or
encumber Lessee’s interest in the leasehold estate created by this Lease by a
mortgage or collateral assignment of lease creating a lien upon or security
interest in the leasehold estate under this Lease (a “Leasehold Mortgage”)
given by Lessee, containing such terms and provisions as Lessee may, in its
reasonable discretion, deem fit and proper subject to Lessor’s approval, which
approval shall not be unreasonably withheld or delayed.  If Lessee encumbers its leasehold estate by a
Leasehold Mortgage, Lessor shall be advised in writing of the name and address
of the holder of the Leasehold Mortgage (the “Leasehold Mortgagee”).

 

11.          SIGNS
AND ADVERTISEMENTS:

 

Lessee may install such signs, billboards or advertisements upon the
Premises which are consistent with Lessee’s use of the Premises and applicable
Laws (as such term is defined herein below).

 

12.          MAINTENANCE
AND REPAIR BY LESSEE:

 

Subject to Lessor’s maintenance and repair obligations set forth in Section 13
hereof, Lessee shall be responsible for maintenance of the heating and air
conditioning equipment and shall keep the same in good working order and
condition, including particularly, but not limited to, protecting water pipes,
heating and air conditioning equipment, plumbing, windows, doors, frames,
glass, elevators and dock bumpers, fixtures, appliances, and sprinkler system
from becoming frozen or being damaged, and shall keep the Premises and the
approaches, sidewalks, parking areas, landscaped areas and the alleys adjacent
thereto, if any, clean and sightly and free from ice and snow.  Subject to Lessor’s maintenance and repair
obligations set forth in Section 13 hereof, at the expiration of the term,
Lessee shall surrender the Premises broom clean, in the same condition as
Lessee received possession thereof, reasonable wear and tear excepted.

 

11

 

13.          REPAIR
AND REPLACEMENT BY LESSOR:

 

Lessor shall be responsible for the repair of any latent defects
arising from the construction of the Building which pertain to the structural
portions of the Building including, without limitation, the roof and exterior
walls (exclusive of inside surfaces), gutters and downspouts of the Building,
the heating and air conditioning equipment, plumbing, windows, doors, frames,
glass, elevators and dock bumpers, fixtures, appliances, and sprinkler system,
provided, that to the extent any such latent defects are covered by any
warranties obtained by Lessor during the Construction of Lessor’s Improvements,
the parties hereto shall first attempt to enforce the repair of such latent
defects through the use of any such warranties.

 

14.          LESSOR’S
RIGHT OF ENTRY:

 

Lessor or Lessor’s agent may enter the Premises at reasonable hours
upon reasonable prior notice (except in case of emergency) to examine the same
and to perform Lessor’s obligations under this Lease,

 

15.          DAMAGE
BY CASUALTY:

 

In case the Premises or the Building shall be destroyed or shall be so
damaged by fire or other casualty as to become unleaseable, then in such event,
at the option of the Lessee, the Term hereby created shall cease, from the date
of such damage or destruction and Lessee shall surrender the Premises and all
interest therein to Lessor, and Lessee shall pay Rent only to the time of such
fire or other casualty.  In case Lessee
shall not so elect to terminate this Lease, this Lease shall continue in full
force and effect and the Lessor shall repair the Premises with all reasonable
promptness, placing the same in as good a condition as they were at the time of
the damage or destruction, and for that purpose may enter said Premises.  In such event, Rent shall abate in proportion
to the extent and duration of unleaseable.

 

16.          PERSONAL
PROPERTY:

 

Lessee shall maintain insurance on all property of Lessee and any other
party which at any time is at or in the Premises, such insurance to be for the
full value of such property and to include a waiver of all rights, including
subrogation, against Lessor and its agents and employees for damage to such
property.

 

17.          ALTERATIONS:

 

Lessee shall not make any significant alterations or additions in or to
the Premises without the prior consent of Lessor, which consent shall not be
unreasonably withheld.  Lessee may make
alterations or additions in and to the Premises which are not structural in
nature and do not have a material adverse effect on the value of the Building
and which are consistent with Lessee’s use of the Premises.

 

18.          UTILITIES
AND SERVICES:

 

After the date of Substantial Completion, Lessee shall obtain and pay
for all electricity, gas, water, fuel and any services or utilities used in or
assessed against the Premises including, but not

 

12

 

limited to, any charges for the burglar and
fire monitoring systems which shall include line and installation charge if
necessary.

 

19.          PUBLIC
REQUIREMENTS:

 

Prior to the date of Substantial Completion, Lessor shall, at its own
cost and expense, observe, comply with and execute, all present and future
orders, regulations, directions, rules, laws, ordinances and requirements of
all Governmental Authorities, (included but not limited to, State, Municipal,
County and Federal Governments and their departments, bureaus, boards, and
officials)  (collectively, “Laws”),
affecting the Premises and Lessee’s use thereof.  Lessor covenants that the Building and the
Premises, shall be in compliance with the foregoing Laws as of the date of
Substantial Completion.  From and after
the date of Substantial Completion, subject to the preceding sentence, Lessee
shall, at its own cost and expense, observe, comply with and execute, all Laws
affecting the Premises and Lessee’s use thereof; provided, however, if as a
result of change in the Laws, Lessee would be required to expend more than
$100,000 to make capital expenditures during the final year of the Initial Term
or Renewal Term, as applicable, in order to comply with such Laws, Lessor shall
be obligated to make any such capital expenditures in excess of $100,000 in
order for Lessee to comply with such Laws.

 

20.          FIXTURES:

 

All of Lessee’s trade fixtures and all personal property, fixtures,
apparatus, machinery and equipment, now or hereafter located upon the Premises,
shall be and remain the personal property of Lessee and the same are herein
referred to as “Lessee’s Equipment”. 
Lessee’s Equipment may be removed from time to time by Lessee; provided,
that if such removal shall injure or damage the Premises, Lessee shall repair
the damage and place the Premises in the same condition as it would have been
if such equipment had not been installed.

 

21.          EMINENT
DOMAIN:

 

If all or a substantial portion of the Premises shall be taken for any
public or quasi-public use under any governmental law, ordinance, or regulation
or by right of eminent domain or shall be sold to the condemning authority
under threat of condemnation or if a substantial part of the Premises is so
taken or sold so that the Premises cannot, after restoration, be economically
used for the purpose intended, this Lease shall terminate and the rent shall
abate during the unexpired portion of this Lease, effective as of the date of
taking of the Premises by the condemning authority.

 

If less than a substantial part of the Premises shall be taken for any
public or quasi-public use under any governmental law, ordinance, or regulation
or by right of eminent domain or shall be sold to the condemning authority
under threat of condemnation or if less than a substantial part of the building
is taken or sold so that the Premises can be economically used for the purpose
intended, this Lease shall not terminate but Lessor shall, at its sole expense,
restore and reconstruct the Building and the Premises to make the same leasable
and economically suitable for the intended use of the premises.  Rent payable for the unexpired portion of the
Lease term shall be adjusted equitably.

 

Lessor and Lessee shall each be entitled to receive such separate
awards and portions of lump-sum awards as may be allocated to their respective
interests in any condemnation

 

13

 

proceedings. 
The termination of this Lease shall not affect the rights of the
respective parties to those awards.

 

22.          DEFAULT
AND REMEDIES:

 

A.            Default
by Lessor.  If Lessor fails to
perform any of the terms, covenants, agreements, or conditions on its part to
be performed under this Lease and that failure continues uncorrected for 30
days after notice of failure from Lessee, unless otherwise specified in this
Lease and subject to the provisions of paragraph D of this section, this Lease
may be terminated by Lessee at any time thereafter during the continuance of
that default by written notice to Lessor, and Lessee shall be relieved of any
and all liability under this Lease.

 

B.            Default
by Lessee.  If at any time or
times Lessee: (i) defaults in the payment of the rent reserved or of any part
thereof upon the date the same becomes due and payable and any default shall
continue for a period of 15 days after any rent is due; (ii) or Lessee fails to
pay any other money that may become or fall due or become payable; or (iii)
defaults in the due and full observance or performance of any other covenant,
provision, or condition under this Lease required to be kept, performed, or
observed by Lessee, and if any such default under clauses (ii) and (iii)
continues for a period of 30 days after written notice to Lessee thereof unless
otherwise specified in this Lease and subject to the provisions of paragraph D
of this section, Lessor may at any time during the continuance of such default
by written notice to Lessee, declare the term of this Lease terminated.

 

C.            Certain
Transfers by Lessee.  If, during
the term of this Lease or any extension or renewal: (i) Lessee makes an
assignment for the benefit of creditors; (ii) a writ of execution or attachment
is levied against or on the property of Lessee; (iii) any action is taken for
the voluntary dissolution of Lessee; (iv) a voluntary or involuntary petition
is filed by or against Lessee having for its purpose adjudication of Lessee as
a bankrupt, or (v) a receiver is appointed for the property of Lessee by reason
of the insolvency or alleged insolvency of Lessee, the occurrence of any such
contingency shall be deemed a breach of this Lease and this Lease may, at the
election of Lessor, upon the happening of any such contingency, be terminated
and declared of no further force and effect, provided, however, that in the
event of a contingency of the character mentioned in (ii), (iv), and (v) above,
Lessee shall have a period of 90 days after the date of the occurrence of such
contingency or contingencies in which to dispose of or eliminate the condition,
or procure a dismissal or a stay of any proceeding constituting the
contingency, before that contingency shall be deemed a breach of this Lease,
and no breach shall exist if that condition is eliminated or disposed of or
said proceedings are dismissed or stayed within the 90-day period.

 

D.            Reasonable
Time to Cure Default.  If any
default by either party (other than the payment of rent by Lessee) cannot
reasonably be remedied within the period of time prescribed in the notice of
default and if such party has commenced to remedy the default and diligently
pursues such remedy thereafter, then the defaulting party shall have additional
time as is reasonably necessary to remedy the default before the Lease can be
terminated or other remedies enforced.

 

E.             Reimbursement
of Expenses.  Each party
(defaulting party) covenants and agrees that if the other party (terminating
party) exercises the right to terminate this Lease as provided in this Lease,
the defaulting party will reimburse the terminating party within 30 days from
the effective date of termination for all reasonable out-of-pocket expenses
incurred by the 

 

14

 

terminating party in terminating the Lease.  Nothing contained in this Lease shall be
deemed to relieve the defaulting party of any other liability arising from any
default that has given rise to such right of termination.

 

F.             Advancement
of Funds.  In case either party
to this Lease (defaulting party) defaults in the performance of any covenant,
condition, or agreement by such party to be performed under this Lease, the
other party (other party) may (but shall not be required to) perform the same
and any money advanced or expenses incurred in so doing, plus interest at the
rate of ten percent (10%) per annum, shall be and become due and owing from the
defaulting party to the other party on demand. 
If the defaulting party is the Lessee, the amount due shall constitute
Additional Rent under this Lease.  If the
defaulting party is the Lessor, the Lessee may deduct the amount of all such
indebtedness from the rental next coming due.

 

23.          NOTICES:

 

Any notice hereunder shall be sufficient if personally delivered, sent
by recognized courier or sent by certified mail, addressed to Lessee at the
Premises, and to Lessor where Rent is payable. 
The effective date of such notice shall be upon delivery if personally
served, one (1) day after delivery to a courier if served by courier and three
(3) days after delivery of same to the United States Post Office if served by
mail.

 

24.          SUBORDINATION:

 

Provided Lessor obtains for the benefit of Lessee a subordination,
non-disturbance and attornment agreement reasonably satisfactory to Lessee,
Lessee hereby agrees to execute from time to time any and all instruments in
writing which may be reasonably requested by Lessor to subordinate Lessee’s
rights under this Lease to the lien of any mortgage or deed of trust.  Lessee agrees to attorn any ground Lessor,
mortgagee or other lien holder which succeeds to Lessor’s interest under this
Lease.

 

25.          SUCCESSORS:

 

The provisions, covenants and conditions of this Lease shall bind and
inure to the benefit of the legal representatives, heirs, successors and
assigns of each of the parties hereto. 
When used herein Lessor shall mean the party which is from time to time
the Lessor under this Lease, and upon transfer of the interest hereunder of a
Lessor, such transferor shall have no further liabilities hereunder.  Lessor shall have no personal liability for
any agreements or obligations under this Lease, all such personal liability
being waived by Lessee on behalf of Lessee and every party claiming by, through
or under it.  All liability of Lessor, if
any, shall be satisfied only out of and against Lessor’s interest in the
Premises and Building.

 

26.          QUIET
POSSESSION:

 

Lessor represents and warrants that it has full right and power to
execute and perform this Lease and to grant the estate demised under this Lease
and that it has fee simple estate in the Premises.  Lessor agrees that so long as Lessee complies
with all material terms, covenants and conditions herein contained on Lessee’s
part to be kept and performed, Lessee shall and may peaceably and quietly have,
hold and enjoy the Premises during the term hereof without such

 

15

 

possession being disturbed or interfered with
by Lessor or by any person claiming by, through or under Lessor.

 

27.          BANKRUPTCY:

 

Neither this Lease nor any interest therein nor any estate hereby
created shall pass to any trustee or receiver in bankruptcy or to any other
receiver or assignee for the benefit of creditors by operation of law or
otherwise during the Term of this Lease or any renewal thereof.

 

28.          ENTIRE
AGREEMENT:

 

This Lease contains the entire agreement between the parties, and no
modification of this Lease shall be binding upon the parties unless evidenced
by an agreement in writing signed by the Lessor and the Lessee after the date
hereof.  If there be more than one Lessee
named herein, the provisions of this Lease shall be applicable to and binding
upon such Lessees, jointly and severally.

 

29.          ESTOPPEL
CERTIFICATE BY LESSEE:

 

Lessee agrees at any time and from time to time, upon not less than ten
(10) days prior written request by Lessor, to execute, acknowledge and deliver
to Lessor a statement in writing certifying (i) 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 stating the modifications), (ii)
the date to which the rental and other charges have been paid in advance, if
any, (iii) that Lessor is not in default under any term of this Lease (or if
any default exists, Lessee will specify), and (iv) that Lessee is in possession
of the Premises and containing such other information or agreements as may be
reasonably requested, it being intended that any such statement delivered
pursuant to this paragraph, may be relied upon by any prospective purchaser of
the fee, or mortgagee or assignee of any mortgage upon the fee, of the
Premises.

 

30.          ESTOPPEL
CERTIFICATE BY LESSOR:

 

Lessor agrees at any time and from time to time, upon not less than ten
(10) days prior written request by Lessee, to execute, acknowledge and deliver
to Lessee a statement in writing certifying (i) 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 stating the modifications), (ii)
the date to which the rental and other charges have been paid in advance, if
any, (iii) that Lessee is not in default under any term of this Lease (or if
any default exists, Lessor will specify), and (iv) that Lessee is in possession
of the Premises and containing such other information or agreements as may be
reasonably requested, it being intended that any such statement delivered
pursuant to this paragraph.

 

31.          ENCUMBRANCES:

 

Subject to Lessor’s obligations in Sections 24 and 26 of this Lease,
this Lease and all of Lessee’s rights hereunder are subject and subordinate to
any mortgage hereafter placed upon Lessor’s interest in the Premises.  Lessee shall not perform any act which shall
in any way encumber the title of Lessor in and to the Premises or the Building,
nor shall the interest or estate of Lessor in the Premises or the Building be
in any way subject to any claim by way of lien or encumbrance, whether by
operation of law or by virtue of any express or implied contract by

 

16

 

Lessee. 
Any claim to, or lien upon, the Premises or the Building arising from
any act or omission of Lessee shall accrue only against the leasehold estate of
Lessee and shall be subject and subordinate to the paramount title and rights
of Lessor in and to the Premises or the Building.

 

32.          JANITORIAL
SERVICE AND GARBAGE REMOVAL:

 

Lessee at its own expense shall provide its own janitorial service and
garbage removal.

 

33.          SURRENDER
OF POSSESSION:

 

Upon termination of this Lease, whether by forfeiture, lapse of time or
otherwise, or upon termination of Lessee’s right to possession of the Premises,
Lessee will surrender and deliver the Premises to Lessor broom clean in the
same condition which the Lessee received possession, reasonable wear and tear
and loss due to fire or other casualty excepted.

 

Upon termination, Lessee may remove Lessee’s fixtures, provided any
damage caused by removal of Lessee from the Premises, including any damage
caused by removal of Lessee’s fixtures shall be repaired and paid for by
Lessee.  In the event Lessee does not remove
Lessee’s fixtures and all Lessee’s personal property from the Premises within a
reasonable time, then Lessee shall be presumed to have conveyed the same to
Lessor under this Lease as a bill of sale without further payment or credit by
Lessor to Lessee.

 

34.          ENVIRONMENTAL
MATTERS:

 

Lessee agrees that it will use, handle, treat, transport, store and
dispose of any Hazardous Substances (as hereinafter defined) in accordance with
the requirements of all applicable Environmental Laws.

 

Lessee does hereby agree to indemnify, defend and hold harmless Lessor
and its agents and their respective officers, directors, beneficiaries,
shareholders, partners, agents and employees from all fines, suits, procedures,
claims and actions of every kind, and all costs associated therewith (including
attorneys’ and consultants’ fees) arising out of or in any way connected with
any use, handling, treatment, storage, transport, deposit, spill, discharge or
other release of Hazardous Materials that occurs during the Term of this Lease,
at or from the Premises, or which arises at any time from Lessee’s use or
occupancy of the Premises, or from Lessee’s failure to provide all information,
make all submissions, and take all steps required by all applicable
governmental authorities.  Lessee’s
obligations and liabilities under this Section 34 shall survive the
expiration of this Lease.

 

Lessor warrants and represents that during Lessor’s ownership of the
Premises, any use, storage, treatment, or transportation of Hazardous
Substances which has occurred in or on the Premises prior to the Commencement
Date (the “Indemnity Period”) has been in compliance with all applicable
Environmental Laws.  Lessor additionally
warrants and represents that no release, leak, discharge, spill, disposal, or
emission of Hazardous Substances has occurred in, on, or under the Premises
during the Indemnity Period and that the no Hazardous Substances were
introduced to the Premises during the Indemnity Period.

 

Lessor does hereby agree to indemnify, defend and hold harmless Lessee
and its agents and their respective officers, directors, beneficiaries,
shareholders, partners, agents and employees from

 

17

 

all fines, suits, procedures, claims and
actions of every kind, and all costs associated therewith (including attorneys’
and consultants’ fees) arising out of or in any way connected with any use,
handling, treatment, storage, transport, deposit, spill, discharge or other
release of Hazardous Substances that occurred during the Indemnity Period, at
or from the Premises, or from Lessor’s failure to provide all information, make
all submissions, and take all steps required by all applicable Governmental
Authorities during the Indemnity Period. 
Lessor’s obligations and liabilities under this Section 35 shall
survive the expiration of this Lease.

 

If at any time during the term of this Lease, either party shall become
aware of the presence of any Hazardous Substances on the Premises, or any fact,
circumstance, claim, potential claim or other situation which could lead to
liability under any Environmental Law, provided such fact, circumstance, claim,
potential claim or other situation is not the result of an act or failure to
act by Lessee, Lessee shall have the right to terminate this Lease with no
further liability or obligation hereunder.

 

“Hazardous Substances” means any substance that: (i) is or
contains asbestos, urea formaldehyde foam insulation, polychlorinated
biphenyls, petroleum or petroleum-derived substances or wasters, radon gas or
related materials; (ii) requires investigation, removal or remediation under
any Environmental Law, or is defined, listed, identified or regulated as a
“Solid Waste”, “Hazardous Waste” or “Hazardous Substance” thereunder, or (iii)
is toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic, or otherwise hazardous and is regulated by any
Governmental Authority or Environmental Law.

 

“Environmental Laws” means any and all Laws relating to the
environment or worker health or safety, including ambient air, surface water,
land surface or subsurface strata, or to emissions, discharges, Releases or
threatened Releases of pollutants, contaminants, chemicals or industrial, toxic
or hazardous substances or wasters (including Solid Wastes, Hazardous Wasters
or Hazardous Substances) or noxious noise or odor into environment, or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, recycling, removal, transport or handling of
pollutants, contaminants, chemicals or industrial, toxic or hazardous
substances or wastes (including, without limitations, petroleum, petroleum
distillates, asbestos or asbestos-containing material, polychlorinated
biphenyls, chlorofluorocarbons (including chlorofluorocarbons-12) or
hydrochlorofluorocarbons).

 

“Release” means any releasing, disposing, discharging,
injecting, spilling, leaking, leaching, pumping, dumping, pouring, emitting,
escaping, emptying, seeping, dispersal, migration, transporting, placing and
the like, including without limitation, the moving of any materials through,
into or upon, any land, soil, surface water, ground water or air, or otherwise
entering into the environment.

 

“Governmental Authority” means (a) any law, statute, code,
ordinance, order, rule, regulation, judgment decree, injunction, writ, edict,
award, authorization or other requirement of any Governmental Authority in
effect, and as then may be interpreted by applicable Governmental Authorities,
at that time, or (b) any obligation included in any certificate, certification,
franchise, permit or license issued by any Governmental Authority or resulting
from binding arbitration, including any requirement under common law, at that
time.

 

18

 

35.          BROKERS:

 

Each party represents to the other that it has not dealt with any real
estate broker, agent or finder in connection with this Lease transaction.

 

36.          PURCHASE
OPTION:

 

In the event Lessor offers the Premises for sale, during the Initial
Term or any Renewal Term of this Lease, it shall provide written notice of such
offer to Lessee.  Lessee shall have the
exclusive right for a period of sixty (60) days from the date of such offer to negotiate
with the Lessor a purchase of the Premises at the offered price or such other
price as the parties may mutually agree. 
In the event that the Lessee does not enter into a binding contract to
purchase the Premises during such sixty (60) day period, then, subject to
Lessee’s right of first refusal in Section 37 hereof, the Lessor shall
have the right to sell the Premises to a third party upon terms and conditions
acceptable to the Lessor.

 

37.          RIGHT
OF FIRST REFUSAL:

 

Lessee shall have the right of first refusal of the Premises as hereinafter
in this Article set forth.  If at
any time during the Term, Lessor shall receive a bona fide offer, other than at
public auction, from a third person, who does not have the power of eminent
domain, for the purchase of the Premises, which offer Lessor shall desire to
accept, Lessor shall promptly deliver to Lessee a copy of such offer, and
Lessee may, within thirty (30) days thereafter, elect to purchase the Premises
on the same terms and price as those set forth in such offer.  If Lessee shall not accept such offer within
the time herein specified therefor, said right of refusal shall cease to exist,
but this Lease shall continue otherwise on all the other terms, covenants, and
conditions in this Lease set forth.  This
right of refusal shall be inapplicable to a transfer, by way of sale, gift, or
devise, including a trust, to or for a party related to Lessor, or to any
transfer from one such related party to another, but shall apply to any
transfer to any other unrelated third person or entity.  For the purpose of this Article, if the then
owner of the Premises or the beneficial interest in a land trust holding title
to the Premises shall be an individual, a related party shall include: (i) a
wife, lineal descendant or spouse of such descendant, ancestor or sibling
(whether by the whole or half blood); (ii) a partnership or limited liability
company of which such owner is a member; (iii) a joint ownership in common,
which includes the then owner of the Premises; or (iv) a corporation, the
majority of whose securities is owned by the owner of the Premises or any one
or more of the foregoing parties.  If the
then owner of the Premises shall be a corporation, a related party shall
include an affiliate, subsidiary or parent corporation, a successor by merger
or consolidation, or the holder or holders of the majority of the securities of
such corporation.  If the Premises shall
be conveyed to the Lessee under this right of first refusal, any prepaid rent
shall be apportioned and applied on account of the purchase price.

 

38.          MEMORANDUM
OF LEASE:

 

On the Commencement Date, the parties hereto agree to execute and
deliver to each other a Memorandum of Lease, Purchase Option and Right of First
Refusal, in recordable form, setting forth the following: (i) the date of this
Lease; (ii) the Commencement Date of this Lease; (iii) the parties to this
Lease; (iv) the Initial Term and Renewal Term options; (v) the legal
description of the Premises; (vi) Lessee’s purchase option and right of first
refusal rights; and (vii) any such other matters reasonably requested by Lessor
and Lessee to be stated therein.

 

19

 

39.          APPLICABLE
LAW:

 

This Lease shall be governed by the laws of the State of
Tennessee.  All covenants, conditions and
agreements of Lessee arising hereunder shall be performable in the county
wherein the Premises are located.  Any
suit arising from or relating to this Lease shall be brought in the county
wherein the Premises are located, provided, however, that to the extent any
suit arises pursuant to the terms and provisions of the Asset Purchase
Agreement and the Tennessee Plant Escrow Agreement, the terms and provisions of
the Asset Purchase Agreement governing the jurisdiction wherein any such suit
arises shall govern and control.

 

40.          GUARANTY
OF LEASE:

 

Transportation Technologies, Inc., the parent company of Lessee (“Guarantor”)
hereby unconditionally and irrevocably, guarantees to Lessor;

 

(i)                                     the payment in full of all amounts
due under the Lease including, without limitation, Base Rent, additional rent,
if any, and amounts due thereunder up to the Surrender Date (as hereinafter
defined), The “Surrender Date” shall mean the date that Lessee shall have:

 

(a)                                  vacated
and surrendered the Premises to Lessor free and clear of (x) all unpermitted
liens and encumbrances and (y) all subleases, licenses, tenancies or claims of
right therein and in broom clean condition, and Lessee has so notified Lessor
in writing; and

 

(b)                                 delivered
keys to the Premises to Lessor together with any alarm, access codes, etc.  to the Premises.

 

(ii)                                  the payment of all reasonable costs
and expenses incurred by Lessor in connection with the enforcement of any of
the provisions of this Guarantee or the Lease to the Surrender Date, or the
attempted collection of any amounts due hereunder or thereunder.  If Lessee shall fail duly and punctually to
pay any such amount, Guarantor shall forthwith pay or perform or observe the
same on demand.

 

(Signature page follows)

 

20

 

IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease as of
the day and year first above written.

 

	
  LESSOR:

  	
  LESSEE:

  
	
   

  	
   

  
	
  INDUSTRIAL REALTY PARTNERS, 

  LLC, a Tennessee limited liability

  company

  	
  IMPERIAL GROUP, L.P.,

  a Delaware limited partnership

  
	
   

  	
  By:

  	
  Imperial Group Holding Corp.-l, a Delaware

  corporation and its general partner

  
	
  By:

  	
   

  	
  /s/ Joe A. Hicks

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
  Chief Manager

  	
   

  	
  By:

  	
   

  	
  /s/ Kenneth M. Tallering

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Kenneth M. Tallering

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
  Vice President

  	
   

  
									

 

 

JOINDER

 

 

	
  Guarantor:

  
	
   

  
	
  Transportation Technologies, Inc.

  
	
   

  
	
   

  
	
  By:

  	
   

  	
  /s/ Andrew M. Weller

  	
   

  
	
   

  	
   

  	
  Andrew Weller

  	
   

  
	
   

  
	
  Title:

  	
   

  	
  President

  	
   

  
						

 

 

Guarantor joins in the execution of the above-referenced Lease solely
for the purposes set forth in Section 40 thereof.

 

 

FIRST AMENDMENT

 

TO

 

AMENDED AND RESTATED

 

BUILD TO SUIT

 

INDUSTRIAL LEASE AGREEMENT

 

THIS FIRST AMENDMENT to the AMENDED AND RESTATED BUILD TO SUIT
INDUSTRIAL LEASE AGREEMENT (the “Lease”) dated as of March l7th,
2000 is made as of the 22nd day of June, 2000, between INDUSTRIAL
REALTY PARTNERS, LLC, a Tennessee limited liability company (the “Lessor”),
as Lessor, and IMPERIAL GROUP, L.P., a Delaware limited partnership (the “Lessee”),
as lessee.

 

WHEREAS, Lessor, in consideration of the additional Base Rent to be
paid by Lessee as set forth herein, has agreed to pay for Change Orders and
other improvements related to Lessor’s Improvements which exceed $5,000,000 but
not in excess of a total cost to the Lessor of $6,000,000 for the aggregate
cost of the Land and construction of the Lessor’s Improvements (exclusive of
the Relocation Costs to be paid by Lessor as set forth in Paragraph 6(E) of the
Lease); and

 

WHEREAS, LESSEE, in consideration of the additional costs paid by
Lessor for such Change Orders and improvements, has agreed to increase the Base
Rent as set forth herein;

 

NOW, THEREFORE, for and in consideration of Ten and no/00 Dollars, and
other good and valuable consideration, the receipt and sufficiency of which are
acknowledged, the parties hereto agree as follows:

 

The recitations set forth above are incorporated herein as if set forth
herein verbatim.

 

1.                                       Paragraph
5(A) of the Lease entitled “Base Rent” is amended by adding a new subparagraph
(v) as follows:

 

(v) In the
event the Lessor pays an amount in excess of $5,000,000 for the aggregate costs
of the Land and the cost of Lessor’s Improvements (the “Applicable Costs”),
then the applicable Rental Rate set forth in each of the preceding
subparagraphs of this Paragraph 5(A) shall be increased by multiplying each
such applicable Rental Rate by a fraction, the numerator of which shall be the
amount paid by the Lesser in excess of $5,000,000 and the denominator of which
shall be $5,000,000.  For example, in the
event Lessor pays $6,000,000, then the applicable Rental Rates will be
increased as follows:

 

(a)                                  For
the first year or the Initial Term, $2.25 multiplied by $1,000,000/$5,000,000 or
20%.  The applicable Rental Rate would be
increased by $.45 or a total of $2.70.

 

 

Lessor and
Lessee acknowledge and agree that Lessor has paid Applicable Costs up to and
including Draw 11 from Dooley & Mack, of $4,771,231.87.  Upon presentation to Lessee of proof of
payment of additional Applicable Costs in excess of $5,000,000, then the
applicable Rental Rate shall be increased in accordance with this subparagraph
and such increase shall be effective for the 1st day of the month
following the month in which such costs are paid and proof of payment submitted
to the Lessee.

 

2.             The
Lease, as amended by this Amendment, shall remain in full force and effect as
Originally executed and delivered by the parties herein, except as expressly
modified and amended herein.  The parties
hereto hereby confirm and reaffirm all of their obligations under the Lease, as
modified and amended by this Amendment.

 

3.             In
the event any provision of this Amendment shall be held invalid or
unenforceable by any court or competent jurisdiction, such holding shall not
invalidate or render unenforceable any other provision hereof.

 

4.             This
Amendment may be executed in any number of counterparts with the same effect as
if all of the parties hereto had signed the same document.  All counterparts shall be construed together
and shall constitute one instrument.

 

[Signature Page Follows]

 

2

 

IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed as of the day and year first above written.

 

	
  LESSOR:

  	
  LESSEE:

  
	
   

  	
   

  
	
  INDUSTRIAL REALTY PARTNERS, 

  LLC, a Tennessee limited liability

  company

  	
  IMPERIAL GROUP, L.P.,

  a Delaware limited partnership

  
	
   

  	
  By:

  	
   

  	
  Imperial Group Holding Corp.-l, a Delaware

  corporation and its general partner

  
	
  By:

  	
   

  	
  /s/ Joe A. Hicks

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
  Chief Manager

  	
   

  	
  By:

  	
   

  	
  /s/ Andrew M. Weller

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
  President

  	
   

  
										

 

 

	
  Guarantor:

  
	
   

  
	
  Transportation Technologies Industries,
  Inc.

  
	
   

  
	
   

  
	
  By:

  	
   

  	
  /s/ Andrew M. Weller

  	
   

  
	
   

  
	
  Title:

  	
   

  	
  Executive Vice President and CFO

  	
   

  
					

 

Guarantor joins in the execution of this Amendment of the
above-referenced Lease solely for the purposes set forth in Section 40 of
the Lease.

 

 

SECOND AMENDMENT

 

TO

 

AMENDED AND RESTATED

 

BUILD TO SUIT

 

INDUSTRIAL LEASE AGREEMENT

 

THIS SECOND AMENDMENT to the AMENDED AND RESTATED BUILD TO SUIT
INDUSTRIAL LEASE AGREEMENT (the “Lease”) dated as of March 17th,
2000 is made as of the 1st day of August, 2000, between INDUSTRIAL
REALTY PARTNERS, LLC, a Tennessee limited liability company (the “Lessor”),
as Lessor, and IMPERIAL GROUP, L.P., a Delaware limited partnership (the “Lessee”),
as lessee.

 

WHEREAS, Lessor and Lessee have agreed upon: (1) the Rentable Square
Feet of Lessor’s Improvements; (2) the amount of Applicable Costs paid by
Lessor contemplated by the First Amendment to the Lease; and (3) the Base Rent;

 

NOW, THEREFORE, for and in consideration of Ten and no/l00 Dollars, and
other good and valuable consideration, the receipt and sufficiency of which are
acknowledged, the parties hereto agree as follows:

 

The recitations set forth above are incorporated herein as if set forth
herein verbatim.

 

1.                                       Paragraph
5(A) of the Lease entitled “Base Rent” is amended by deleting Paragraph 5(A)
and inserting a new Paragraph 5(A) in its place and stead as follows:

 

5.             Rent

 

A.                                    Base
Rent.  In consideration of
leasing the Premises and construction of the Lessor’s Improvements, Lessee
covenants to pay as and for base rent (the “Base Rent”), subject to
adjustment as set forth below, an amount equal to the following:

 

(i)                                     For
the period prior to June 1, 2000, zero Base Rent;

 

(ii)                                  For
the month of June, 2000, the sum of $6,251.46;

 

(iii)                               For
the month of July, 2000, the sum of $16,670.55;

 

(iv)                              For
the month of August, 2000, the sum of $33,341.10;

 

(v)                                 Beginning
September 1, 2000 and for each subsequent month of the first year of the
Initial Term, monthly Base Rent of $50,011.65;

 

 

(vi)                              For
the second year of the Initial Term, Base Rent equal to the sum of $666,822.00
in equal monthly installments of $55,568.50;

 

(vii)                           For
each subsequent year of the Initial Term, subject to the adjustments set forth
in Paragraph B of this Paragraph 5, Base Rent equal to the sum of $800,186.40
in equal monthly installments of $66,682.20;

 

All Base Rent shall be payable in equal monthly installments in advance
on the first day of each calendar month during the Term hereof; except that
Base Rent for any partial calendar month shall be prorated based on the number
of days in such month.

 

2.                                       The
parties further acknowledge and agree that the Commencement Date shall mean May
12, 2000.

 

3.                                       The
Lease, as amended by this Amendment, shall remain in full force and effect as
originally executed and delivered by the parties hereto, except as expressly
modified and amended herein.  The parties
hereto hereby confirm and reaffirm all of their obligations under the Lease, as
modified and amended by this Amendment.

 

4.                                       In
the event any provision of this Amendment shall be held invalid or
unenforceable by any court of competent jurisdiction, such holding shall not
invalidate or render unenforceable any other provision hereof.

 

5.                                       This
Amendment may be executed in any number of counterparts with the same effect as
if all of the parties hereto had signed the same document.  All counterparts shall be construed together
and shall constitute one instrument.

 

[Signature Page Follows]

 

2

 

IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed as of the day and year first above written.

 

	
  LESSOR:

  	
  LESSEE:

  
	
   

  	
   

  
	
  INDUSTRIAL REALTY PARTNERS, 

  LLC, a Tennessee limited liability

  company

  	
  IMPERIAL GROUP, L.P.,

  a Delaware limited partnership

  
	
   

  	
  By:

  	
   

  	
  Imperial Group Holding Corp.-l, a Delaware

  corporation and its general partner

  
	
  By:

  	
   

  	
  /s/ Joe A. Hicks

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
  Chief Manager

  	
   

  	
  By:

  	
   

  	
  /s/ Kenneth M. Tallering

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
  VP

  	
   

  
										

 

 

	
  Guarantor:

  
	
   

  
	
  Transportation Technologies Industries,
  Inc.

  
	
   

  
	
   

  
	
  By:

  	
   

  	
  /s/ Andrew M. Weller

  	
   

  
	
   

  
	
  Title:

  	
   

  	
  President & COO

  	
   

  
					

 

Guarantor joins in the execution of this
Amendment of the above-referenced Lease solely for the purposes set forth in Section 40
of the Lease.

 

 

IFCTN Rent

 

	
  Use & Occupancy Certificate

  	
   

  	
  5/12/00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  First Month

  	
   

  	
  0

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Second Month

  	
   

  	
  25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Third Month

  	
   

  	
  50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Fourth Month

  	
   

  	
  100

  	
  %

  

 

Rent Payable
on 1st — prorated for days of occupancy

 

	
  Sq Footage

  	
   

  	
  222274

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Rate/Sqft

  	
   

  	
  $

  	
  2.25

  	
  **

  
	
   

  	
   

  	
   

  	
   

  
	
  Annual Rent

  	
   

  	
  $

  	
  500,116.50

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Monthly Rent

  	
   

  	
  $

  	
  41,676.38

  	
   

  

 

	
   

  	
   

  	
  # of Days

  	
   

  	
  Rent

  	
   

  
	
  May

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  First Month

  	
   

  	
  18

  	
   

  	
  $

  	
  0.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  June

  	
  (due 6/1/00)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  First Month

  	
   

  	
  12

  	
   

  	
  $

  	
  0.00

  	
   

  
	
  Second Month
  (25%)

  	
   

  	
  18

  	
   

  	
  $

  	
  6,25l.46

  	
   

  
	
  Total

  	
   

  	
  30

  	
   

  	
  $

  	
  6,251.46

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  July

  	
  (due 7/1/00)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Second Month
  (25%)

  	
   

  	
  12

  	
   

  	
  $

  	
  4,167.64

  	
   

  
	
  Third Month
  (50%)

  	
   

  	
  18

  	
   

  	
  $

  	
  12,502.91

  	
   

  
	
  Total

  	
   

  	
  30

  	
   

  	
  $

  	
  16,670.55

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  August

  	
  (due 8/1100)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Third Month
  (50%)

  	
   

  	
  l2

  	
   

  	
  $

  	
  8,335.28

  	
   

  
	
  Fourth Month
  (100%)

  	
   

  	
  18

  	
   

  	
  $

  	
  25,005.83

  	
   

  
	
  Total

  	
   

  	
  30

  	
   

  	
  $

  	
  33,341.10

  	
   

  

 

	
  Revised Rent
  Based on Increased Costs

  
	
   

  	
   

  	
   

  	
   

  
	
  Base Costs

  	
   

  	
  $

  	
  5,000,000.00

  	
   

  
	
  Increased
  Costs

  	
   

  	
  $

  	
  1,000,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Percentage
  Increase

  	
   

  	
  20

  	
  %

  
						

 

i

 

	
   

  	
   

  	
  Base Rent

  	
   

  	
  Increase

  	
   

  	
  Revised Base Rent

  	
   

  
	
  Year 1

  	
   

  	
  $

  	
  2.25

  	
   

  	
  20

  	
  %

  	
  $

  	
  2.70

  	
   

  
	
  Year 2

  	
   

  	
  $

  	
  2.50

  	
   

  	
  20

  	
  %

  	
  $

  	
  3.00

  	
   

  
	
  Year 3

  	
   

  	
  $

  	
  3.00

  	
   

  	
  20

  	
  %

  	
  $

  	
  3.60

  	
   

  

 

 

	
  Year 1 Base Rent-starting September 1,
  2000

  	
   

  	
   

  	
   

  
	
  Sq. Footage

  	
   

  	
  222274

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Rate/Sqft

  	
   

  	
  $

  	
  2.70

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Annual Rent

  	
   

  	
  $

  	
  600,139.80

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Monthly Rent

  	
   

  	
  $

  	
  50,011.65

  	
   

  
	
  Year 2 Base
  Rent

  	
   

  	
   

  	
   

  
	
  Sq Footage

  	
   

  	
  222274

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Rate/Sqft

  	
   

  	
  $

  	
  3.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Annual Rent

  	
   

  	
  $

  	
  666,822.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Monthly Rent

  	
   

  	
  $

  	
  55,568.50

  	
   

  
	
  Year 3 Base
  Rent

  	
   

  	
   

  	
   

  
	
  Sq Footage

  	
   

  	
  222274

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Rate/Sqft

  	
   

  	
  $

  	
  3.60

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Annual Rent

  	
   

  	
  $

  	
  800,186,40

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Monthly Rent

  	
   

  	
  $

  	
  66,682.20

  	
   

  
						

 

ii

 

THIRD AMENDMENT TO

AMENDED AND RESTATED

BUILD TO SUIT

INDUSTRIAL LEASE AGREEMENT

 

THIS THIRD AMENDMENT (the “Third Amendment”) is made and entered
into as of the 31st day of August, 2000, by and between INDUSTRIAL
REALTY PARTNERS, LLC, a Tennessee limited liability company (the “Lessor”)
and IMPERIAL GROUP, L.P., a Delaware limited partnership (“Lessee”);

 

WHEREAS, Lessor and Lessee entered into that certain Amended and
Restated Build to Suit Industrial Lease Agreement dated March 17, 2000
(the “Lease”); and

 

WHEREAS, Lessor and Lessee entered into that certain First Amendment to
Amended and Restated Build to Suit Industrial Lease Agreement limited dated June 22,
2000 (the “First Amendment”); and

 

WHEREAS, Lessor and Lessee entered into that certain Second Amendment
to Amended and Restated Build to Suit Industrial Lease Agreement dated August 1,
2000 (the “Second Amendment”); and

 

WHEREAS, Lessor and Lessee, in order to obtain financing from Aid
Association for Lutherans (“AAL”), and for the benefit of AAL, have
agreed to make certain modifications, and changes to the Lease, as amended by
the First Amendment and Second Amendment.

 

NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and in accordance with Paragraph 28 of the Lease, the parties
hereby agree as follows:

 

1.             Ratification.  All of the terms, covenants, conditions and
provisions of the Lease, as amended by the First Amendment and the Second
Amendment, shall remain in full force and effect and except as expressly
modified and set forth herein, are hereby ratified and affirmed.  All capitalized terms not defined herein
shall have the same meaning as set forth in the Lease, the First Amendment or
the Second Amendment, as applicable.

 

2.             Amendment of
Paragraph 5B of Lease.  The Lease
is hereby amended by deleting Paragraph 5B entitled “Adjustments to Base Rent”
in its entirety, and inserting in its place and stead a new paragraph 5B as
follows:

 

“B.   Adjustments to Base Rent.  On the first day of the sixth year of the
Initial Term and on the 1st day of each subsequent year of the Initial Term,
the Base Rent shall be adjusted by the lesser of (y) the cumulative increase or
decrease from the Commencement Date to the Sixth (6th) Anniversary and each
subsequent anniversary date, as applicable, of the Commencement Date, as
relevant, in the Consumer Price Index for the City of New York, Urban Wage
Earners and Clerical Workers, all items (1982-84 = 100) as published by the
Bureau of Labor Statistics, United States Department of Labor, or any
reasonably similar index to the extent the foregoing index at any time ceases
to be published

 

 

or readily
available (the “CPI Change”); or (z) one hundred five percent (105%) of
the prior year’s Base Rent. 
Notwithstanding the foregoing, the Base Rent as adjusted by this Paragraph
shall in no event be less than the Base Rent for the prior year.”

 

3.             Amendments to
paragraphs 36 and 37.  The Lease
is hereby amended by adding at the end of each of paragraph 36 and 37 the
following:

 

“In the event
Lessee purchases the Premises pursuant to this paragraph, Lessee shall be
entitled at the closing of the purchase thereof to a credit against the
purchase price in an amount equal to five (5%) percent of the gross purchase
price (provided, however, that the terms and provisions of this paragraph are
subject to the terms and provisions of that certain Specific Assignment,
Subordination, Non-Disturbance and Attainment by and among Lessor, Lessee and
Aid Association for Lutherans.”

 

4.             Amendment of
Paragraph 40 of Lease.  The Lease
is hereby amended by deleting Paragraph 40 in its entirety, and inserting in
its place and stead the following:

 

“40.  Guaranty of Lease.

 

Transportation
Technologies Industries, Inc., the parent company of Lessee, has guaranteed the
Lease in accordance with the provisions of the Guaranty of Lease which is
attached as Exhibit “B”.”

 

5.             Amendment of
Paragraph 1 of the Second Amendment. 
The Second Amendment is hereby amended by inserting, after the words
“Paragraph B of this Paragraph 5”, located in the second line of subparagraph
(vii) of Paragraph 5.A., entitled “Base Rent,” the following:

 

“as amended by
the Third Amendment”.

 

6.             Governing Law.  This Third Amendment shall be governed by and
construed in accordance `with the laws of the State of Tennessee.

 

7.             Counterparts.  This Third Amendment may be executed in any
number of counterparts, which counterparts, when considered together, shall
constitute a single, binding, valid and enforceable agreement.

 

8.             No Default.  Lessor and Lessee hereby represent and
warrant that, as of the date hereof, neither Lessor nor Lessee is in default
under the terms and conditions of the Lease, the First Amendment or the Second
Amendment, and no event has occurred which with the giving of notice or passage
of time would constitute such a default. 
Furthermore, as of the date hereof, neither Lessor nor Lessee have any
claims, demands, causes of action, defenses, setoffs or counterclaims against
the other arising out of the Lease, the First Amendment or the Second
Amendment, nor in any way relating thereto, or arising out of any other
transaction between Lessor and Lessee.

 

2

 

9.             Severability.   In the event any provision of this Third
Amendment shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof.

 

3

 

IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed as of the day and year first above written.

 

	
  LESSEE:

  	
  LESSOR:

  
	
   

  	
   

  
	
  IMPERIAL GROUP, L.P.,

  a Delaware limited partnership 

  	
  INDUSTRIAL REALTY PARTNERS, LLC, a

  Tennessee limited liability company

  
	
   

  	
   

  
	
  By:

  	
  Imperial Group Holding Corp.-l, a Delaware

  corporation and its general partner

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Joe A. Hicks

  
	
   

  	
  Title:

  	
   

  	
  Chief Manager

  
	
  By:

  	
   

  	
  /s/ Kenneth Tallering

  	
   

  
	
  Name:

  	
   

  	
  Kenneth Tallering

  	
   

  
	
  Title

  	
   

  	
  V.P. of
  Imperial Group Holding Corp.-1, a

  	
   

  
	
   

  	
   

  	
  Delaware
  Corp. and its General Partner.

  	
   

  
										

 

 

	
   

  	
  GUARANTOR:

  
	
   

  	
   

  
	
   

  	
  TRANSPORTATION TECHNOLOGIES

  INDUSTRIES, INC., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth Tallering

  	
   

  
	
   

  	
  Name:

  	
  Kenneth
  Tallering

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Guarantor joins in the execution of this
  Third Amendment to the Lease solely for the purposes set forth in Paragraph 40
  of the Lease, as amended by this Third Amendment.

  
					

 

 

GUARANTY OF LEASE

 

THIS Guaranty of Leases (this “Guaranty”) is made as of the 31st
day of August, 2000, by Transportation Technologies Industries, Inc. (“Guarantor”),
in favor of Industrial Realty Partners, LLC, a Tennessee limited liability
company (“Landlord”).

 

RECITALS

 

A.                                   Landlord
and Imperial Group, L.P., a Delaware limited partnership (“Tenant”)
entered into a certain Amended and Restated Build to Suit Industrial Lease
Agreement dated March 17, 2000 amended by First Amendment to Amended and
Restated Build to Suit Industrial Lease Agreement dated June 22, 2000 and
Second Amendment to Amended and Restated Build to Suit Industrial Lease
Agreement dated August 1, 2000 and Third Amendment to Amended and Restated
Build to Suit Industrial Lease Agreement dated August 31, 2000 (the “Lease”)
with respect to premises situated and known as 160 Kirby Road, Portland,
Tennessee 37148 (the “Leased Space”).

 

AGREEMENT

 

NOW, THEREFORE, Guarantor, intending to be legally bound and in
consideration of the execution and delivery of the Lease by Landlord and other
good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, hereby irrevocably, unconditionally and absolutely becomes
guarantor of the prompt and faithful performance by Tenant of all of the terms,
covenants, conditions, agreements and provisions to be kept, observed and
performed by Tenant under the Lease, including without limitation, the payment
by Tenant of the minimum and additional rent and any and all other sum or sums
to become due thereunder (collectively, the “Rent”), and hereby further
agrees as follows:

 

1.                                       Guarantor
agrees that (a) this obligation shall be binding upon Guarantor without any
further notice or acceptance hereof; (b) immediately upon receipt of notice by
Guarantor of the occurrence of a Default (as such term is defined in the
Lease), Guarantor will pay to Landlord the Rent and will keep, observe and
perform all the terms, covenants, conditions, agreements and provisions of the
Lease which are to be kept, observed and performed by Tenant under the Lease;
(c) no extension, forbearance or leniency extended by Landlord to Tenant shall
discharge Guarantor and Guarantor agrees that it will remain liable hereunder
at all times; (d) Landlord and Tenant may at any time or times enter into such
modifications, extensions, amendments or other covenants respecting the Lease,
and Guarantor shall not be released thereby and Guarantor shall then continue
as guarantor with respect to the Lease as so modified, extended, amended or
otherwise affected, provided Guarantor has consented to any and all such
modifications, extensions or amendments; (e) neither Guarantor’s obligation to
make payment in accordance with the provisions of this Guaranty nor any remedy
for the enforcement thereof shall be impaired, modified, changed, released or
limited in any manner whatsoever by any impairment, modification, change,
release of limitation of the liability of Tenant or its estate in bankruptcy
arising from the operation of any present or future provision of the Federal
Bankruptcy Code or any other law of the United States or of any state relating
to bankruptcy, insolvency, reorganization, readjustment, receivership or
similar proceeding of any nature whatsoever, or the

 

 

disaffirmance
of the Lease in any such proceedings or otherwise; and (f) Guarantor shall
continue as guarantor with respect to the Lease upon any assignment and/or
subletting by Tenant of any or all of Tenant’s interests in, to and under the
Lease or the Leased Space, whether or not Guarantor has received notice of or
consent to any and all such assignments and/or sublettings.

 

2.                                       Guarantor
further agrees to be bound by each and every term, covenant, condition, agreement
and provision of the Lease, with the same force and effect as if it were
designated in and had executed the Lease as tenant thereunder.  Guarantor hereby acknowledges receipt and
acceptance of a copy of the Lease.

 

3.                                       This
as an agreement of both guaranty and suretyship and the liability of Guarantor
shall be direct and may be enforced without Landlord’s being required to resort
to any other right, remedy or security, or to proceed against any other
party.  Landlord may proceed against
Tenant, Guarantor or other parties in such order as Landlord may elect without
waiving its right to proceed singly, successively or cumulatively against
Guarantor or any other party.

 

4.                                       Guarantor
may, at Landlord’s option, be joined in any action or proceeding commenced by
Landlord against Tenant, in connection with and based upon any terms,
covenants, conditions, agreements or provisions of the Lease.  Guarantor waives any action by Landlord of
any nature whatsoever against Tenant, including without limitation, any right
which Guarantor might otherwise have, under any statute or rule of law, to
require Landlord to take any action against Tenant prior to proceeding against
Guarantor hereunder.

 

5.                                       Guarantor
hereby acknowledges that the rights, benefits and privileges hereunder shall
inure to the benefit of each and every assignee of Landlord and of Landlord’s
interest in, to and under the Lease, and that Guarantor shall continue to be
bound hereunder upon such assignment without further documentation provided,
however, Guarantor shall receive notice of such assignment.

 

6.                                       All
notices hereunder shall be given in accordance with the Notice provision of the
Lease.

 

7.                                       This
Guaranty shall be binding upon Guarantor, and its successors and assigns and
shall inure to the benefit of Landlord and its successors and assigns.

 

8.                                       This
Guaranty shall be construed, interpreted and governed under the laws of the
state where the Leased Space is located.

 

9.                                       If
Landlord brings any action to enforce its rights under the Lease or this Guaranty
and is the prevailing party in such action, Guarantor shall pay to Landlord,
all attorney’s fees, expenses and court costs actually incurred.  If Tenant or Guarantor is the prevailing
party in such action, Landlord shall pay to Guarantor all attorney’s fees,
expenses and court costs actually incurred.

 

2

 

IN WITNESS WHEREOF, Guarantor has caused the Guaranty Agreement to be
duly executed, under seal, as of the day and year first above written.

 

 

	
   

  	
  GUARANTOR:

  
	
   

  	
   

  
	
   

  	
  Transportation Technologies Industries,
  Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
      /s/ Kenneth
  Tallering

  
	
   

  	
   

  	
  Name: Kenneth Tallering

  
	
   

  	
   

  	
  Title:Exhibit
10.35

 

LEASE AGREEMENT

 

THIS AGREEMENT OF LEASE, made and entered
into this 19th day of August, 2003, by and between CE CAPITAL GROUP,
LLC (herein the “Landlord”), and GUNITE CORPORATION (herein the “Tenant”),

 

WITNESSETH:

 

1.             Leased Premises and Term of Lease.

 

LANDLORD hereby demises and leases unto TENANT the building and real
estate located at
                          
Elkhart County, Indiana, and more particularly described in Exhibit A attached
hereto and incorporated herein.  The said
real estate and improvements are referred to collectively herein as the
“Premises”.  The term of this lease shall
be for a period of ten (10) years and shall commence upon the earlier of (i) March 1,2004,
or (ii) the date Premises are delivered to TENANT in substantially complete
condition. The date of commencement determined as provided above is herein
called the “Commencement Date.”  The
Commencement Date shall in no event be postponed by reason of any delay caused
by Tenant (for example Tenant’s failure to timely approve or furnish plans or
specifications, make material or color selections or decisions necessary for
substantial completion of such work, or complete Tenant’s work).  As used in this Lease, “Term” shall include
the original Term and any extension thereof effected in accordance with an
extension option, if any, expressly set forth herein.

 

Construction and Possession.  Subject to events and delays due to causes
beyond its reasonable control, Landlord agrees to perform and complete the work
on the construction specifications as set out in Exhibit
    .

 

Tenant’s Acceptance of the Premises.  Upon delivery of possession of the Premises
to Tenant as provided herein, Tenant shall execute and deliver to Landlord an
agreement in the form attached as Exhibit B (“Acceptance Agreement”) to
acknowledge and confirm the Commencement Date and that Tenant has accepted the
Premises for occupancy subject only to those defects specified by Tenant in the
Acceptance Agreement.  Landlord shall
promptly thereafter correct such defects, subject to delays beyond Landlord’s
reasonable control.  If Tenant takes
possession of and occupies the Premises but fails to timely execute and deliver
the Acceptance Agreement, Tenant shall be deemed to have accepted the Premises
for occupancy and the condition thereof (including, but not limited to, the
tenant finish improvements constructed thereof) as satisfactory in all
respects.

 

Surrender of the Premises.  Upon the expiration or earlier termination of
this Lease or upon the exercise by Landlord of its right to re-enter the
Premises without terminating this Lease, Tenant shall immediately surrender the
Premises to Landlord, together with all alterations, improvements and other
property as provided herein, in a clean condition and otherwise in good order,
condition and repair except for ordinary wear and tear, failing which Landlord
may place the Premises in such condition at Tenant’s expense.

 

1

 

2.             Rent.

 

Monthly Rent. Tenant shall pay, in advance on
the first day of each calendar month during the Term, Monthly Rent as specified
in Exhibit C (Absolute Net Rental Rate Formula) of the Basic Lease
Provisions as the basic rent per month for the Premises.  The initial installment of Monthly Rent shall
be due and payable upon the Lease Commencement Date.  In the case of a partial calendar month at or
prior to the beginning of the Term, the Monthly Rent for the partial month
shall be prorated on a daily basis and shall be paid with the first month’s
rent.  Tenant also agrees to pay Landlord
any excise, sales or privilege tax, if any, imposed by any governmental
authority on account of this Lease or the rent paid hereunder, which tax is in
substitution for, or in lieu of, real estate taxes.

 

All payments owning by TENANT pursuant to this lease shall be made to
LANDLORD at 3930 Edison Lakes Parkway, Suite 200, Mishawaka, IN 46545, or at
such other place or places as LANDLORD may hereafter designate, and shall be
made without setoff or deductions and with reasonable attorneys’ fees and costs
of collection.  In the event TENANT fails
to pay any rent, expenses, charges or other payments to be paid by it pursuant
to this lease within ten (10) days after the due date thereof, then any unpaid
amounts shall be subject to a late payment administration charge of One Hundred
Dollars ($100) per day from the due date of date of payment.  Notwithstanding this late payment charge,
nonpayment of any amounts due under this lease shall constitute a default by
TENANT.

 

It is the intention of LANDLORD and TENANT that this shall be a true
net lease; that the rent herein specified shall be net to LANDLORD at all times
dining the term of this lease; and that all costs, expenses, and obligations of
every kind relating to the Premises shall be the obligation of TENANT.

 

3.             Security Deposit.

 

TENANT shall pay to the LANDLORD concurrently herewith the sum of
Thirty Thousand ($30,000.00) representing a security deposit.  The security deposit shall be held by
Meridian Title Corporation, Mishawaka, Indiana, in an interest bearing account
for the account of the TENANT as security for the full and complete performance
by TENANT of all of the terms, covenants, and conditions of this Lease.

 

In the event TENANT commits a default hereunder, LANDLORD, at its
option, may apply the security deposit, or any part thereof, plus any sum held
as the last month’s rent to compensate LANDLORD for any loss, cost, damage, or
expense sustained by reason of such default. 
Upon LANDLORD’S request, the TENANT shall forthwith remit to LANDLORD
cash sufficient to restore such sums to the original sums deposited and
TENANT’S failure to do so within ten (10) days after receipt of a demand
therefore shall be a default under this Lease. 
If at the end of the term of this Lease or any extension or renewal of
this Lease, TENANT is not in default hereunder, the balance of the security
deposit shall be returned to TENANT.

 

LANDLORD may deliver the funds deposited hereunder to any purchaser of,
or successor to, LANDLORD’S interest in this Lease or the Premises, and
thereupon LANDLORD shall be discharged from all liability with respect to such
deposit.

 

2

 

4.             Covenants of Landlord.

 

LANDLORD agrees to the following:

 

(a)           That so long as TENANT is not in default in the
performance of any of the conditions or provisions hereof, TENANT may peaceably
hold and enjoy possession of the Premises during the term of this lease without
any interruption from LANDLORD or any person, firm, or corporation lawfully
claiming through LANDLORD.

 

(b)           That LANDLORD will make all repairs necessary for the
proper maintenance of the roof of the building and exterior walls included in
the Premises, except for damage thereto caused by the negligence or willful
acts of TENANT; provided, however, that TENANT shall give LANDLORD written
notice of any roof defect or exterior wall defect requiring repair and LANDLORD
shall have a reasonable time after receipt of such notice to cause such repairs
to be made.

 

(c)           The LANDLORD named in this Agreement may transfer and
assign, in whole or in part, all its rights and obligations under this
Agreement and in the Real Estate.  After
such transfer or assignment the LANDLORD named in this Agreement will have no
further liability to the TENANT under this Agreement for the obligations
assumed by the assignee or transferee.

 

5.             Covenants of Tenant.

 

TENANT agrees as follows:

 

(a)           That it will pay the rent for the Premises as herein
stated and all other payments and charges owing to LANDLORD pursuant to this
Lease at the time and in the manner herein stated, without relief from
valuation and appraisement laws and with reasonable attorneys’ fees and all
other expenses and costs occasioned by the nonpayment thereof and occasioned by
the default by TENANT in the performance of any of the terms of this agreement
to be performed by the TENANT.

 

(b)           That is shall pay as and when the same become due and
payable the entire cost of all electricity, gas, water, sewerage, telephone,
cellular, computer access, and other utilities and services used in or about
the Premises, and it will not permit the charges therefore to become
delinquent.

 

(c)           That it will pay all Real Estate Taxes assessed
against the Premises accruing and/or payable during the Term of this
lease.  The Term “Real Estate Taxes” as
used herein means all real property taxes and assessments that are levied or
assessed against the Premises by any lawful governmental authority for each calendar
year or portion thereof commencing on the Commencement Date.  TENANT shall pay, prior to the due date and
accrual of any interest or penalties thereon, all Real Estate Taxes levied
against the Premises and any buildings and improvements thereto to the full
extent of any installment accruing during the Term, even though said Real
Estate Taxes may be payable after the expiration of the Term, except as
otherwise set forth in this Section. Real Estate Taxes due for the calendar
year 2004 (which represents Real Estate Taxes accrued during 2003) shall be
prorated between LANDLORD and TENANT based upon the Commencement Date; and Real
Estate Taxes due for the last year of the Term shall be prorated between
LANDLORD and TENANT based on the last day of the Term.  Prior to the expiration of the Term, as may
be extended, and in addition to

 

3

 

paying its Real Estate Taxes for the previous
year, TENANT shall pay-to LANDLORD its pro-rata share of “estimated” Real
Estate Taxes accruing during the last year of the Term (based on the previous
years Real Estate Taxes), subject to adjustment based on receipt of the actual
tax bill. Commencing on the Commencement Date, except for the Real Estate Taxes
for 2004 (which represent the Real Estate Taxes accruing for 2003) which shall
be paid as set forth below, TENANT shall be responsible for payment of Real
Estate Taxes before the due date. LANDLORD shall deliver to TENANT all tax
bills it receives for the Premises promptly following receipt of the same.  TENANT shall provide LANDLORD with a receipt
showing taxes have been paid. Failure to pay taxes by TENANT shall be an event
of default under this lease and, in the event LANDLORD pays the unpaid taxes,
TENANT shall be assessed interest on the unpaid balance at the greater of 10%
or Prime Rate plus 600 basis points.  The
term “Prime Rate” as used herein shall mean the prime rate as published in the Wall Street Journal, and which is described as the base rate
on corporate loans at large U.S. money center commercial banks, as such rate
may vary from time to time.  For the year
2004, TENANT shall pay its pro-rata share of 2004 Real Estate Taxes within
thirty (30) days of receipt of LANDLORD’s written notification that such Real
Estate Taxes are due which notification shall include a copy of the bill for
the Real Estate Taxes and LANDLORD’s determination of TENANT’s pro-rata share.
Upon LANDLORD’s receipt of TENANT’s pro-rata share of 2004 Real Estate Taxes,
LANDLORD shall pay the 2004 Real Estate Taxes directly to the appropriate
tax-collecting agency, and thereafter provide TENANT a receipt that such Real
Estate Taxes were paid.

 

(d)           That it shall procure, maintain, and deliver to
LANDLORD in companies to be approved by LANDLORD policies of fire, tornado,
hazard, and extended risk insurance in an amount of not less than the full
replacement value of the buildings and improvements now or hereafter situated
upon the real estate which insurance shall insure the buildings and
improvements now or hereafter erected upon the real estate against damage by
fire, tornado, and other hazards generally covered by comprehensive policies of
extended risk insurance.  TENANT shall
pay all premiums on said policies as and when the same become due and payable
and said policies shall contain a loss payable clause making such insurance
payable to LANDLORD as their respective interests may appear. All of such
policies of insurance shall be issued by insurers authorized to do business in
the State of Indiana and shall provide that the coverage not be cancelled
without at least ten (10) days prior written notice to LANDLORD, TENANT, and
LANDLORD’S mortgagee, and that any losses shall be payable notwithstanding any
act or negligence of TENANT or LANDLORD which might otherwise result in
forfeiture of the insurance.  Copies of
such insurance policies shall be delivered to LANDLORD, together with
satisfactory evidence of payment of all required premiums, prior to the
commencement of any coverage period.

 

(e)           That at its cost and expense it will make all repairs
and will take all action necessary for the proper maintenance of the Premises,
both internal and external, inclusive of lawn, lawn sprinkler system, fire
protection system, HVAC, and plumbing, except for roof and exterior wall
repairs to be made by LANDLORD pursuant to paragraph 4(b) hereof, and upon the
termination of this lease by lapse of time or otherwise, it will peaceably
yield up possession of the Premises in the same condition and repair as
received, loss by fire, lighting, windstorm, and ordinary wear and tear
excepted.

 

In the event TENANT shall fail to provide such necessary repairs and
maintenance, LANDLORD shall have the option, but not the obligation, to cure
such default for the account

 

4

 

and at the expense of TENANT either during or
after the term of this lease, and any payments so made by LANDLORD shall be
additional debt owing by TENANT to LANDLORD, shall become immediately due and
payable, and shall bear interest at the rate of one
percent (1%) per month from the date of payment.

 

(f)            That LANDLORD shall not be liable for any injuries or
damage to the property of TENANT or for any loss or damage of any kind
sustained by TENANT by reason of any defective condition of the Premises or by
reason of any occurrence in or about the Premises except
if the LANDLORD is in breach of its obligation hereunder which causes said
injury or damage.

 

(g)           That it shall not assign this lease or any option or
right granted to it by this lease nor shall it sublet the Premises or any
portion thereof without first obtaining the written consent of LANDLORD, which
consent shall not be unreasonably withheld. Any such assignment or subletting
permitted by LANDLORD shall not relieve or release TENANT from any of its obligations,
covenants, undertakings, representations, warranties, and indemnifications set
forth in this lease.  LANDLORD shall not
withhold its consent to an assignment by TENANT so long as the proposed
assignee (i) agrees in writing to be bound by all of the terms and conditions
contained herein and (ii) demonstrates, to LANDLORD’s satisfaction, adequate
financial resources to meet the obligations of TENANT under this Lease, in
which event tenant will be relieved and released from its obligations covenants,
undertakings, representations, warranties, and indemnifications set forth in
this lease.

 

(h)           That it will use Premises for light
assembly/manufacturing/distribution and such additional purposes normally
ancillary and related thereto.  TENANT
shall use the Premises in such a manner that the reputation of the building and
adjoining areas shall not be injured and in accordance with all ordinances of
Elkhart County, all laws of the State of Indiana, all Federal laws, and all
other lawful rules and regulations which are now or may hereafter be in
effect.  TENANT shall maintain the
Premises in a safe, clean, and presentable condition and shall not commit
waste.  TENANT shall store all materials,
trash, and waste within the building and shall not permit any outside storage
on the Premises.  TENANT shall be
responsible for any and all building repairs or renovations or changes required
that are deemed necessary by codes for TENANT to operate a light
assembly/manufacturing business.

 

(i)            That it will not make any structural
or exterior cosmetic changes, alterations, or additions to the
Premises without first having obtained the written consent of LANDLORD, which
consent shall not be unreasonably withheld. 
If any such alterations, changes, or additions are permitted by LANDLORD
to be made, then the same shall forthwith be and become a part of the Premises
and belong absolutely to LANDLORD and not subject to removal, change, or
destruction by TENANTS; provided, however, that upon the termination or
expiration of this lease, TENANT shall have the right to remove from the
Premises any and all items of personal property which can be removed without
material damage to the Premises.  The
cost of repairing any damage caused by such removal shall be paid by TENANT.

 

If said changes, alterations, or additions are permitted to be made,
the cost thereof shall be paid by TENANT whenever the same shall become due and
payable and it shall not permit any mechanic’s lien or other lien to be filed
against or attached to the Premises or any part thereof for any purpose
whatsoever.  In the event any such lien
is filed against or attached to the

 

5

 

Premises or any part thereof as a result of
such changes, alterations, or additions, TENANT shall forthwith and no later
than thirty (30) days after the filing of such lien, take any and all action
and make such payments as may be required to fully discharge such lien.  Failure to obtain the discharge of any lien
shall be an event of default under this Lease.

 

(j)            That it shall procure and maintain at its expense
throughout the term of this lease, or any additional period during which it is
in possession the Premises, policies of insurance with a responsible company or
companies indemnifying and protecting LANDLORD and TENANT against loss, claims,
actions, suits for damage or damages, customarily covered by such policies,
claimed to be directly or indirectly, in whole or in part, due to the condition
of the Premises or any part thereof or any appurtenances thereto or equipment
thereon or due to the happening of any occurrence in or about the Premises or
due to any act, omission, or negligence of TENANT or any agent, employee, or
tenant of TENANT, in each case as customarily covered by such policies.  Such insurance shall have maximum coverage
limits as may be mutually agreed between LANDLORD and TENANT; but in no event
shall the limits thereof be less than Two Million Dollars ($2,000,000.00) for
each occurrence whether such losses, claims, or damages result from bodily
injury or damage to property.

 

(k)           That LANDLORD by and through its designated
representative shall have the right at all reasonable times to enter upon the
Premises for the purpose of examining exhibiting, repairing, altering, or
making additions to the Premises, provided that such actions by LANDLORD shall
not unduly interfere with the use of the Premises by TENANT.  The LANDLORD also shall have the right to
exhibit the Premises to prospective purchasers or tenants during the last
twelve (12) months of the term of this lease or any extended term of this
lease.

 

(l)            Except for claims resulting solely from the negligence
of LANDLORD, TENANT shall indemnify and defend LANDLORD and the Premises at the
expense of TENANT, against any and all claims, expenses, liabilities, awards,
and judgments, including costs of defense and reasonable attorneys’ fees,
arising from the use of the Premises by TENANT, its agents, employees,
licensees, or invitees, or from any occurrence on or about the Premises or from
any default by TENANT hereunder or any act, omission, or from the negligence of
TENANT or its agents, employees, licensees, or invitees.  Except for claims
resulting solely from the negligence of TENANT, LANDLORD shall indemnify and
defend TENANT against any and all claims, expenses, liabilities, awards and
judgments, including costs of defense and reasonable attorney’s fees arising
from the management of the Premises by LANDLORD or from way default by LANDLORD
hereunder or any act, omission, or from the negligence of LANDLORD or its
agent, and employees.

 

(m)          That it will not engage in the generation, storage, or
transportation of any hazardous waste materials or in the operation of a
hazardous waste facility on the Premises. 
TENANT shall indemnify LANDLORD completely and unconditionally without
limitation as to time against any costs, expenses, claims, liabilities, awards,
and judgments of any type or nature related to or arising from removal or
remedial action incurred as a result of any governmental order, award, or
judgment occurring as the result of the generation, storage, transportation or
disposal of hazardous materials on the Premises or the noncompliance by TENANT
or the Premises with any existing regulation, law rule, or ordinance pertaining
to environmental matters or hazardous materials by TENANT.  The indemnification shall include, but shall
not be limited

 

6

 

to, the cost of defense incurred by LANDLORD,
court costs, expenses, attorneys’ fees, judgments, awards, expense of
investigation, and any other related expense arising or claimed to have arisen
from an environmental claim of any type pertaining to the Premises or the
conduct of TENANT on or about the Premises.

 

(n)           TENANT covenants that it has examined and inspected
the Premises and accepts the same in the condition they are not in and without
warranty, express or implied; and TENANT is not in any way relying upon any
statements, representations, or warranties by LANDLORD or LANDLORD’S agents
with regard to the condition of the Premises.

 

(o)           TENANT shall, at its expense, obtain all licenses and
permits required for, and comply with all Federal, State and local laws,
ordinances, orders, rules and regulations pertaining to the operation of the
Premises for its Intended Use, now or hereafter in force. Governmental
penalties, fines or damages imposed on any portion of the Premises as a result
of the acts of TENANT, its employees or agents, shall be paid by TENANT within
thirty (30) days after receipt of said notice by TENANT unless reasonably
contested by TENANT.

 

6.             Destruction of Premises.

 

In the event the Premises are materially damaged or destroyed by fire,
lightning, windstorm or other hazard, and the Premises become untenantable,
dangerous, or unfit for occupancy or use by TENANT, LANDLORD shall have a
period of thirty (30) days from the date of such damage or destruction to
notify TENANT of its intention to make the Premises fit for occupancy.  In the event LANDLORD does not give TENANT such
notice of intention within thirty (30) days from the date of such damage or
destruction or in the event LANDLORD gives such notice but fails to have the
Premises made fit for occupancy within one hundred eighty (180) days after the
date of such damage or destruction, TENANT shall have the option to terminate
this lease by serving upon LANDLORD its written notice of termination and
TENANT shall not he liable for any rental payments as of the date of such
damage or destruction.  The rent shall
abate for any period during which the Premises are untenantable, and LANDLORD
shall refund to TENANT any prepaid but unearned rent for such untenantable
period.  Tenant shall also maintain
insurance that will pay to Landlord the amount of any rent which may he abated
during the term of this Lease.

 

7.             Option
to Extend.

 

TENANT shall have the option to extend the term of this lease, for an
additional five year period upon such terms and conditions as outlined in
Exhibit C.  This option to extend shall
exist only in the event TENANT is not then in default under any of the terms
and conditions of this lease.  TENANT
shall provide LANDLORD with written notice of its intention not to exercise its
option to extend at least twelve (12) months prior to the expiration of the existing
term.  In the event the required twelve
(12) months notice to not extend is not received, the lease will automatically
extend for the option period.

 

8.             Waiver
of Subrogation.

 

LANDLORD and TENANT, and all parties claiming by, under or through them,
hereby mutually release and discharge each other from all claims and
liabilities arising from or caused

 

7

 

by any hazard covered by insurance in
connection with property on or activities conducted on the Premises regardless
of the cause of the damage or loss.

 

9.             Holdover
by Tenant.

 

No holding over by Tenant after expiration or earlier termination of
the Term shall operate to extend the Lease. 
In the event of any unauthorized holding over, Tenant shall pay Monthly
Rent equal to one hundred fifty percent (150%) of the Monthly Rent payable for
the month immediately preceding such holding over plus Additional Rent equal to
one hundred fifty percent (150%) of the estimated Additional Rent (including,
but not limited to, the estimated Annual Operating Expense Adjustment)
applicable to the period of such holding over; and Tenant shall indemnify
Landlord against all claims, damages, costs and expenses (including, but not
limited to, reasonable attorneys’ fees) in connection with such holding over,
including, without limitation, all claims by any other person or entity to
which Landlord may have leased all or any part of the Premises effective upon
or after expiration or termination of the Term. Acceptance of such rent by
Landlord shall in no event constitute a waiver of Tenant’s default or an
authorization of Tenant’s holding over nor prevent Landlord from exercising any
of its other rights and remedies.  Any
holding over with the consent of Landlord in writing shall thereafter
constitute a lease from month-to-month.

 

Nothing herein contained shall limit or
prohibit the right of LANDLORD to obtain a judgment of immediate possession and
damages in the event TENANT shall hold over or occupy the Premises beyond the
term or extended term of this lease without LANDLORD’S written consent.

 

10.          Landlord’s
Right to Cure Defaults.

 

LANDLORD may, but shall not be obligated to, cure at any time after
thirty (30) days notice, any default by TENANT under this lease; and whenever LANDLORD
so elects, all costs and expenses incurred by LANDLORD in curing such default;
including without limitation, reasonable attorneys’ fees, together with
interest on the amount of costs and expenses so incurred at the greater of the
rate of twelve percent (12%) per annum or 800 basis points over the
then-current Prime Rate, shall be paid by TENANT to LANDLORD on demand and
shall be recoverable as additional rent. 
In the event the default on the part of the LANDLORD concerns the
condition of the roof, the LANDLORD shall not be considered to be in default,
if after being made aware of the condition of the roof by the TENANT, the
LANDLORD has commenced repairs of the roof within thirty (30) days of
notification by the TENANT.

 

8

 

11.          Condemnation.

 

In the event the Premises or any portion thereof are condemned for any
public use or purpose by any legally constituted authority and by reason
thereof the Premises are rendered untenantable or unsuitable for use by TENANT,
then this lease shall terminate from the time when possession taken by such
public authority and the rental and other payments shall be accounted for
between LANDLORD and TENANT as of the date of the surrender of possession. Such
termination shall be without prejudice to the rights of either LANDLORD or
TENANT to recover compensation from the condemning authority for any loss or
damage caused by such condemnation. 
Neither LANDLORD nor TENANT shall have any rights in or to any award
made to the other by condemning authority.

 

12.          Default
of Tenant.

 

The occurrence of any one or more of the following event shall be
considered a default by TENANT;

 

(a)           Failure of TENANT to perform any covenant or
obligation under this lease within thirty (30) days after written notice of
default is received from LANDLORD, except TENANT’S failure to make rental
payments with a ten (10) day grace period from which no written notice of
default is required from LANDLORD.

 

(b)           The assignment by TENANT of any of TENANT’S assets for
the benefit of creditors.

 

(c)           The Levying of a Writ of Execution or Attachment
against TENANT’S property if not released or discharged within ninety (90) days
thereafter.

 

(d)           The commencement in a court of competent jurisdiction
of proceedings for TENANT’S: reorganization, liquidation, involuntary
dissolution adjudication as a bankrupt, insolvency, or for the appointment of a
receiver of the TENANT’S assets, if such proceedings are not dismissed or any
receiver, trustee, or liquidator appointed therein discharged within ninety
(90) days after the institution of the proceedings.

 

(e)           The placement of a mechanic’s lien or claim against
the property for which TENANT has no legal or equitable defense, if the lien or
claim is not released or LANDLORD is not indemnified to its satisfaction within
thirty (30) days after written notice of lien or claim is first given to
TENANT.

 

13.          Hazardous
Material.

 

TENANT agrees to neither cause nor permit any Hazardous Material to be
brought upon, kept or used in or about the real estate by anyone, including
TENANT and its agents, employees, contractors or invitees, without the prior
written consent of LANDLORD (which LANDLORD shall not unreasonably withhold as
long as TENANT demonstrates to LANDLORD’S reasonable satisfaction that such
Hazardous Material is necessary or useful to TENANT’S business and will be
used, kept and stored in a manner that complies with all laws regulating any
such Hazardous Material so brought upon or used or kept in or about the real
estate and TENANT provides LANDLORD with evidence that all governmental
approvals and permits as well as proof of

 

9

 

insurance for the permitted activity).  If TENANT breaches the obligations stated in
the preceding sentence, or if the presence of Hazardous Material on the real
estate-results in contamination of the real estate, then as a result of such
contamination TENANT shall indemnify, defend and hold LANDLORD harmless from
any and all claims, judgments, damages, penalties, fines, costs, liabilities,
or losses (including, without limitation, diminution of value of the real
estate, damages for the loss or restriction on use of usable space or of any
amenity of the real estate, damages, costs or expenses of remediation required
or deemed necessary by TENANT, and sums paid in settlement of claims,
attorney’s fees, consultant fees and expert fees which arise during or after
the completion or termination of this Agreement.  This indemnification of LANDLORD by TENANT includes,
without limitation, costs incurred in connection with any investigation of site
conditions or any clean-up, remediation, 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 or under
the real estate, but only to the extent required by law or by applicable
governmental agency regulation.  Without
limiting the foregoing, if the presence of any Hazardous Material on the real estate
caused or permitted by TENANT results in any contamination of the real estate,
TENANT shall promptly take all actions required by law or applicable
governmental agency regulations at its sole expense as are necessary to return
the real estate to the condition existing prior to the introduction of any such
Hazardous Material to the real estate; provided that LANDLORD’S approval of
such action shall first be obtained, which approval shall not be unreasonably
withheld so long as such actions would not potentially have any material
adverse long term or short term effect on the real estate.

 

As used herein, the term “Hazardous Material” means any hazardous or
toxic substance, material or waste which is or become regulated by any local
governmental authority, the State of Indiana or the United States
Government.  The term “Hazardous
Material” includes, without limitation, any material or substance which is (i)
defined as a “hazardous substance” under I.C. 13-78,7-1 of the Indiana
Hazardous Substance Response Trust Fund Act; (ii) petroleum; (iii) asbestos;
(iv) designated as a “hazardous substances” pursuant to Section 311 of the
Federal Water Pollution Control Act (33 U.S.C. § 1317); (v) defined as a
“hazardous waste” pursuant to Section 1004 of the Federal Resource
Conservation and Recovery Act 42 U.S.C. § 6901 et seq. (42 U.S.C. § 6903);
(vi) defined as a “hazardous substance” pursuant to Section 101 of the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
§ 9601 et seq. (42 U.S.C. § 9601) or (vii) defined as a “regulated
substance” pursuant to Subchapter IX, Solid Waste Disposal Act (regulation of
Underground Storage Tanks), 42 U.S.C. § 6991 et seq. (42 U.S.C. §6991).

 

In the event of default by the TENANT and this contract is terminated
either voluntarily or by other legal means the TENANT’S environmental liability
extends beyond the life of this contract for any and all environmental damage
that may be caused to the property during the life of this contract.

 

10

 

14.          Remedies
of Landlord.

 

Upon the occurrence of any event of TENANT default set forth in this
LEASE, Landlord shall have the following rights and remedies, in addition to
those allowed at law or in equity, any one or more of which may be exercised
without further notice to or demand upon Tenant:

 

(a)           Landlord may re-enter the Premises and cure any
default of Tenant, in which event Tenant shall reimburse Landlord as Additional
Rent for any costs and expenses which Landlord may incur to cure such default;
and Landlord shall not be liable to Tenant for any loss or damage which Tenant
may sustain by reason of Landlord’s action, regardless of whether caused by
Landlord’s negligence or otherwise.

 

(b)           Landlord may terminate this Lease, in which event (i)
neither Tenant nor any person claiming under or through Tenant shall thereafter
be entitled to possession of the Premises, and Tenant shall immediately
thereafter surrender the Premises to Landlord; (ii) Landlord may re-enter the
Premises and dispossess Tenant or any other occupants of the Premises by any
means permitted by law, and may remove their effects, which termination,
repossession and removal shall be without prejudice to any other remedy which
Landlord may have for possession, arrearage in rent, continuing rental
obligations which Tenant would have had under this Lease had this Lease not
been terminated and all other damages and remedies available at law and in
equity; it being expressly understood and agreed that the liabilities and
remedies specified in this Subsection shall survive the termination of
this Lease.

 

(c)           Landlord may, without terminating this Lease, re-enter
the Premises and re-let all or any part of the Premises for a term different
from that which would otherwise have constituted the balance of the Term and
for rent and on terms and conditions different from those contained herein,
whereupon Tenant shall be obligated to pay Landlord as liquidated damages the
difference between the rent provided for herein and that provided for in any
lease covering a subsequent reletting of the Premises, or, in the event
Landlord is unable to relet the Premises, the rent provided for herein, for the
period which would otherwise have constituted the balance of the Term of this
Lease, together with all of Landlord’s reasonable costs and expenses for
preparing the Premises for re-letting, including all repairs, tenant finish
improvements, brokers’ and attorneys’ fees, and all loss or damage which
Landlord may sustain by reason of such re-entry and re-letting.

 

(d)           Landlord may sue for injunctive relief or to recover
damages for any loss resulting from the breach.

 

(e)           Landlord shall use commercially reasonable efforts to
mitigate its damages in case of Tenant’s default by reletting the Premises at a
rental which is reasonable in the circumstances.  In any action, proceeding or hearing on any
claim or counterclaim that Landlord has failed to use reasonable efforts or
that Landlord relet the Premises at a rental that was not reasonable, the fact
that such rental may be at a rate that it lower than the rent specified herein,
or payable in different increments, shall not, by itself, establish that
Landlord failed to use reasonable efforts to mitigate its damages.

 

11

 

15.          Waiver.

 

No waiver by LANDLORD or TENANT of any breach of any term, covenant or
condition hereof shall be deemed a waiver of the same or any subsequent breach
of the same or any other term, covenant, or condition hereof, regardless of
LANDLORDS knowledge of such breach when such rent is accepted.  No covenant; term or condition of this lease
shall be deemed waived by LANDLORD or TENANT unless waived in writing.

 

16.          Notices.

 

	
  TO LANDLORD:

  	
   

  	
  Bristol Rail Associates, LLC

  
	
   

  	
   

  	
  Attn: George S. Cressy

  
	
   

  	
   

  	
  3930 Edison Lakes Pky. #200

  
	
   

  	
   

  	
  Mishawaka, IN 46545

  
	
   

  	
   

  	
   

  
	
  TO TENANT:

  	
   

  	
  Gunite Corporation

  
	
   

  	
   

  	
  Attn: James D.
  Cirar

  
	
   

  	
   

  	
  302 Peoples
  Avenue

  
	
   

  	
   

  	
  Rockford, IL
  61104

  

 

17.          Partial
Invalidity.

 

If any provision of this lease or the application thereof to any person
or circumstance shall to any extent be invalid or unenforceable, the remainder
of this lease, or the application of such provision to persons or circumstances
other than those as to which it is invalid or unenforceable, shall not be
affected thereby and each provision of this lease shall be valid and
unenforceable to the fullest extent permitted by law.

 

18.          Paragraph
Headings, Number and Gender.

 

This lease shall be construed with reference to paragraph headings
which are inserted only for convenience of reference.  The use herein of singular term shall include
the plural and use of the masculine, feminine or neuter genders shall include
all others.

 

19.          Entire
Agreement; Successors.

 

This lease agreement constitutes the entire agreement of the parties
with respect to each and all of the terms of lease of the Premises and shall
not be altered or amended except by written agreement of the parties.  This agreement shall be construed and
interpreted in accordance with the laws of the State of Indiana and shall inure
to the benefit of, and be binding upon, the parties hereto and their respective
successors and assigns.

 

20.          Brokers.

 

LANDLORD and TENANT each represent to the other that it has not dealt
with any finder or real estate broker other than Grubb & Ellis/Cressy &
Everett Commercial Company and that no finder or real estate broker was in any
way connected with the transaction contemplated hereby.  Neither LANDLORD or TENANT has engaged any
brokers who would be entitled to any commission or fee based on the execution
of this Lease, other than Grubb & Ellis/Cressy &

 

12

 

Everett Commercial Company, who shall be paid
by LANDLORD pursuant to separate agreement.

 

21.          Encumbrance
of Landlord’s Estate.

 

(a)           LANDLORD shall not be required to subordinate or
hypothecate by mortgage, or other security interest, the fee simple estate of
LANDLORD for the benefit of TENANT or TENANT’s financing needs.

 

(b)           LANDLORD may transfer, mortgage or encumber the
Premises provided any sale is subject to TENANT’S rights created by this Lease,
and any mortgage or encumbrance is subject to a Subordination and
Non-Disturbance agreement in a form which does not materially interfere with or
jeopardize TENANT’S rights or interest hereunder.  LANDLORD shall satisfy in a timely manner all
obligations associated with and supported or secured by any mortgages and
encumbrances it places or caused to be placed on the Premises.  TENANT shall not unreasonably delay the
execution of a Subordination and Non-Disturbance Agreement which reasonably
complies with this Section.

 

22.          Estoppel
Certificate.

 

At any time and from time to time either party, upon request of the
other party, will execute, acknowledge and deliver an instrument, stating if
the same be true, that this Lease is a true and exact copy of the Lease between
the parties hereto, that there are no amendments hereto (or stating what
amendments there may be) that the same is then in full force and effect and
that, to the best of its knowledge, there are no offsets, defenses or
counterclaims with respect to the payment of Rent hereunder or in the
performance of the other terms, covenants, and conditions hereof on the part of
the TENANT or LANDLORD, as the case may be, to be performed, and that as of
such date no default has been declared hereunder by either party or if so,
specifying the same.  Such instrument
will be executed by the other party and delivered to the requesting party within
fifteen (15) days of receipt of a request therefore.

 

13

 

IN WITNESS WHEREOF, the parties have executed
this agreement of lease this day and year first above written.

 

	
  LANDLORD

  	
  TENANT

  
	
   

  	
   

  
	
  BRISTOL RAIL ASSOCIATES, LLC

  	
  GUNITE CORPORATION

  
	
   

  	
   

  
	
  By:

  	
  /s/ George S. Cressy

  	
   

  	
  By:

  	
  /s/ Kelly Bodway

  	
   

  
	
   

  	
   

  	
   

  
	
  Its:

  	
  Managing Memebr

  	
   

  	
  Its:

  	
  Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  
	
  STATE OF ILLINOIS

  	
  )

  
	
   

  	
  )

  	
  SS:

  
	
  COUNTY OF OGLE

  	
  )

  	
   

  
							

 

Before me, the undersigned, a Notary Public
in and for said County and State, personally appeared Virginia L. Neal
acknowledged the execution of the foregoing Lease Agreement.

 

Witness my hand and Notarial Seal this 19th day of August, 2003.

My commission Expires:  08/27/05

 

	
  /s/ Virginia
  L. Neal

  	
   

  
	
   

  
	
   

  	
  , Notary
  Public

  
	
   

  	
  Residing in
  Ogle County

  
	
  [SEAL}

  	
   

  
	
   

  
	
   

  
	
  STATE OF INDIANA

  	
  )

  	
   

  
	
   

  	
   

  	
  )

  	
  SS:

  
	
  COUNTY OF ST. JOSEPH

  	
  )

  	
   

  
					

 

Before me, the undersigned, a Notary Public
in and for said County and State, personally appeared George S. Cressy
acknowledged the execution of the foregoing Lease Agreement.

 

Witness my hand and Notarial Seal this 18th day of
September, 2003.

My commission Expires:  9/12/07

 

	
  /s/ Shawna Marie Pixley

  	
   

  
	
   

  	
   

  
	
   

  	
  , Notary
  Public

  
	
   

  	
  Residing in
  St. Joseph County

  
	
  [SEAL]

  	
   

  

 

14

 

EXHIBIT A

 

TITLE SURVEY

 

SOUTH HALF OF SECTION 28

WASHINGTON TOWNSHIP, ELKHART COUNTY, INDIANA

 

LEGAL DESCRIPTION PARCEL A

 

THAT PART OF THE SOUTH HALF OF SECTION 28,
TOWNSHIP 38 NORTH, RANGE 6 EAST, WASHINGTON TOWNSHIP. ELKHART COUNTY, INDIANA,
DESCRIBED AS:

 

COMMENCING AT THE SOUTHEAST CORNER OF THE
SOUTHEAST QUARTER OF SAID SECTION 28; THENCE SOUTH 89’32’38” WEST ALONG
THE SOUTH LINE OF SAID SOUTHEAST QUARTER 663.88 FEET TO A BAR AND CAP AND THE
PLACE OF BEGINNING; THENCE CONTINUING SOUTH 89’32’38” WEST ALONG THE SAID SOUTH
LINE 615.01 FEET TO A BAR AND CAP; THENCE NORTH 0’51’03” WEST 678.06 FEET TO A
BAR AND CAP ON THE SOUTHEAST LINE OF THAT PARCEL CONVEYED TO U.S. AGGREGATE IN
DEED RECORD 2000-05241; THENCE NORTH 69’53’56” EAST ALONG SAID SOUTHEAST LINE
651.42 FEET TO A BAR A CAP LOCATED AT THE NORTHWEST CORNER OF THAT TRACT
CONVEYED TO MAPLE STREET INC., BY DEED RECORD 2001-37900; THENCE SOUTH 0’51’03”
EAST ALONG THE WEST LINE OF SAID MAPLE STREET INC. TRACT AND SAID WEST LINE
EXTENDED 897.06 FEET TO THE PLACE OF BEGINNING, AND CONTAINING 11.12 ACRES.

 

NOTES CORRESPONDING TO SCHEDULE B.

 

LACK OF ACCESS FROM CAPTIONED REAL
ESTATE.  AS OF THE DATE OF THIS SURVEY
THE SUBJECT PROPERTY DOES NOT HAVE DIRECT ACCESS TO A PUBLIC RIGHT-OP-WAY.
PROPOSED ACCESS IS VIA AN EXTENSION TO EARTHWAY DRIVE AS SHOWN.

 

ZONING INFORMATION

 

THIS PROPERTY IS LOCATED ENTIRELY WITHIN A
M-1 ZONE, PER ZONING ORDINANCE, COUNTY OF ELKHART, INDIANA

 

FRONT YARD SETBACK: 75 FEET FROM CENTER LINE OF RIGHT-OF-WAY

SIDE YARD SETBACK: 25 FEET

REAR YARD SETBACK:  15 FEET

 

MAXIMUM HEIGHT PERMITTED FOR BUILDINGS:

60 FEET OR 5 STORIES.

 

MAXIMUM LOT COVERAGE IS 75 PER CENT.

 

15

 

STATEMENT OF ENCROACHMENTS.

 

NONE NOTED

 

[TITLE COMPANY INFORMATION]

 

16

 

EXHIBIT B

ACCEPTANCE
OF PREMISES

 

	
  TENANT:

  	
  Gunite Corporation

  
	
   

  
	
  LANDLORD:

  	
  Bristol Rail Associates, LLC

  
			

 

ADDRESS OF PREMISES:

 

APPROXIMATE SQUARE FOOTAGE OF PREMISES:
[l08,4l3s.f.]

 

	
  DATE LEASE SIGNED:

  	
  August 19, 2003

  

 

DATE LANDLORD’S NOTICE SENT:

 

COMMENCEMENT DATE:

 

EXPIRATION DATE:

 

NEXT RENTAL PAYMENT DUE:

 

AMOUNT DUE ON NEXT RENTAL PAYMENT:

 

 

Tenant confirms the accuracy of the above information with respect to
the Lease. Tenant hereby acknowledges that (i) it has accepted the Premises and
(ii) the condition of the Premises is satisfactory and in conformity with the
provisions of the Lease in all respects, except as noted below.

 

	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

17

 

Guarantee Agreement

 

This Guarantee is given this 10th
day of September, 2003, by Transportation
Technologies Industries, Inc. (Guarantor) to and for the benefit of Bristol Rail Associates, LLC (Landlord) an Indiana Limited
Liability Company.

 

Whereas Bristol Rail Associates, LLC has
entered into a Lease Agreement with Gunite Corporation
(Tenant); and

 

Whereas Bristol Rail Associates,
LLC requires additional security with respect to the Tenant’s
ability to perform all its obligations under the terms of the lease;

 

Now, therefore, in consideration of the
foregoing and of the benefits to be derived by the Tenant and Landlord from the
undertaking by the Guarantor, the parties do hereby agree as follows:

 

1.             Guarantor hereby
unconditionally guarantees to Landlord that it will be responsible for any and
all payments due in connection with the lease executed by the parties on the 19th
day of August, 2003, to the extent such payments are not made in a timely
fashion by the Tenant

 

2.             This Guarantee shall
remain in full force and effect during the term of the ground lease, and any
extensions of the ground lease.

 

3.             This Guarantee shall
remain in full force and effect and shall not be effected, modified, or
impaired upon the happening from time to time of any event, including without
limitation the following, whether or not the Guarantor has received notice of
or provided consent with respect to any of the following:

 

(a)                                  the
waiver, compromise, settlement, release, or termination of any obligations,
duties or rights under the lease agreement;

 

(b)                                 the
failure to give notice to the Guarantor of any default or breach under the
terms of the lease agreement;

 

(c)                                  the
grant of any extension of time to the Tenant to perform any obligation under
the terms of the lease;

 

(d)                                 any
failure, omission, or delay by the Landlord in asserting any right under the
terms of the lease agreement.

 

4.             This Guarantee is
made by the Guarantor for the benefit of the Landlord, who shall be entitled to
enforce this Agreement by proceeding directly against the Guarantor upon the
default of the Tenant in its payment obligations under the ground lease entered
into by the parties.

 

5.             No remedy of the
Landlord is intended to be exclusive of any other available remedy or remedies,
but shall be cumulative and in addition to every other remedy under this
Guarantee Agreement or under the ground lease agreement itself; or existing
under law or equity.

 

18

 

6.             Notice to the
Guarantor shall be provided to:

 

Transportation Technologies Industries, Inc.

980 North Michigan Ave., Suite 1000

Chicago, IL 60611

 

7.             Notice to the
Landlord shall be provided to:

 

Bristol Rail Associates, LLC

3930 Edison Lakes Parkway, Suite 200

Mishawaka, IN

Attention: George S. Cressy, Jr.

 

8.             The invalidity of
unenforceability of any paragraph hereunder shall not affect the validity or
enforceability of any of the other remaining provisions under this Agreement.

 

9.             This Guarantee shall
be construed and interpreted in accordance with the laws of the State of
Indiana.

 

 

	
  /s/ Donald
  C. Mueller

  	
   

  
	
  Transportation Technologies Industries,
  Inc.

  	
   

  
	
   

  
	
   

  
	
  Title:

  	
  C.F.O.

  	
   

  
			

 

19

 

Lease Amendment

 

THIS LEASE AMENDMENT (“Amendment”) is entered into the 3rd
day of February, 2004 by and between BRISTOL RAIL ASSOCIATES, LLC (“Landlord”),
and GUNITE CORPORATION (“Tenant”).

 

Recitals

 

Whereas the Landlord and Tenant have previously entered into a Lease
Agreement dated the l9th of August, 2003 (“Lease”); and

 

Whereas Sansome Pacific Properties, Inc. has entered into a Letter of
Intent to purchase the leased property provided that certain amendments are
made to the Leaset; and

 

Whereas the parties desire to amend certain terms with respect to the
Lease to be effective upon the sale of the property to Sansome Pacific
Properties, Inc. or its lawful assignee (collectively “Sansome”).

 

NOW, THEREFORE for valuable consideration the sufficiency of which is
acknowledged by the parties and in order to induce and facilitate the transfer
of the property to Sansome, the parties agree as follows:

 

1.             The Annual Net Rent
as set forth on Exhibit C to the Lease shall be amended effective upon the sale
of the property to Sansome to provide that the Annual Net Rent shall be
equivalent to 10.25% of the total costs of the land and construction.  By way of example, and based upon the
estimates of $3,157,900 as set forth on Exhibit C it is anticipated that the
Annual Net Rent will be amended to $323,685. 
The actual amount of Annual Net Rent will be determined based upon the
final construction costs associated with the project.

 

2.             On each anniversary
date of the Commencement Date (as defined in the Lease), and each anniversary
thereafter, the Monthly Rent and Annual Net Rent shall increase 1.75% per annum
over the previous year’s Monthly Rent and Annual Net Rent.  The increase shall be effective each year during
the term of the Lease, including options.

 

3.             The Lease shall be an
absolute triple net lease and the Tenant shall be responsible for all
maintenance, repair and replacement costs associated with the property.  Paragraph 4(b) of the Lease shall be deleted.  A new paragraph 5(p) shall be added to the
Lease as follows:

 

“(p)         That
TENANT will make all repairs necessary for the proper maintenance of the roof
of the building, exterior walls, and structural components included in the
Premises, except for damage thereto caused by the negligence or willful acts of
LANDLORD.”

 

4.             The Term of the Lease
shall be for a period of fifteen (15) years from the Commencement Date.

 

5.             The Landlord shall
have the right to receive upon written request, and from time to time,
financial statements from the Tenant and Guarantor of the Lease.

 

20

 

6.             Paragraph 5(g) of the
Lease is amended to delete the following words at the end of the paragraph “in
which event tenant will be relieved and released from its obligations covenants,
undertakings, representations, warranties, and indemnifications set forth in
this lease.”

 

7.             A new paragraph 5(q)
shall be added to the Lease as follows:

 

“(q)         That
all insurance policies required to be maintained by Tenant pursuant to this
lease shall be issued by insurance companies with a general policy holder’s
rating of not less than “A” and a financial rating of not less than Class “X”,
as rated in the most current available “Best’s Key Rating Guide,” and shall
name Landlord and Landlord’s lender, if any, as additional insureds, and in the
case of insurance required by paragraph 5(b) of the Lease, as loss payees.

 

4.             This Amendment shall
be effective upon the transfer of the title to the property to Sansome at which
time consideration of Fifty Thousand Dollars shall be paid by Landlord to
Tenant through escrow as consideration in connection with this Amendment, and
in the event said transfer does not for any reason take place then this
Amendment shall be null and void.

 

	
  LANDLORD

  
	
   

  
	
  BRISTOL RAIL ASSOCIATES, LLC

  
	
   

  
	
   

  
	
  /s/ George
  S. Cressy

  	
   

  
	
  By: George S. Cressy-Managing Member

  	
   

  
	
   

  
	
  TENANT

  
	
   

  
	
  GRANITE CORPORATION

  
	
   

  
	
   

  
	
  /s/ Kelly
  Bodway

  	
   

  
	
  By: Kelly Bodway-Vice President

  
			

 

21

 

GUARANTOR

 

The undersigned agrees as follows:

 

1.             The undersigned has
executed that certain “Guarantee Agreement” dated September 10, 2003
(“Guarantee”), guarantying the obligations of Tenant pursuant to the Lease.

 

2.             In paragraph 2 of the
Guarantee, the word “ground” is deleted wherever it appears.

 

3.             The undersigned
agrees that the Guarantee is in full force and effect.

 

4.             The undersigned
agrees that the Guarantee applies to all of the terms of the Lease Amendment
set forth above.

 

TRANSPORTATION TECHNOLOGIES INDUSTRIES, INC

 

 

	
   

  	
  /s/ Kenneth Tallering

  	
   

  
	
  By:

  	
  Kenneth M. Tallering

  	
   

  
	
   

  	
  VP, Gen. Couns. & Sec’y

  	
   

  

 

22

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