Commercial Vehicle Group, Inc 10-Q for FY2026 Q1
Commercial Vehicle Group, Inc. (CVGI)
10-Q
2026-05-05
For: 2026-03-31
View Original
Added on
May 05, 2026
About this 10-Q
Commercial Vehicle Group, Inc filed this 10-Q on May 5, 2026, covering the quarter ended March 31, 2026 (FY2026 Q1).
Headline figures
Quarter ended March 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $171.5M
- up 1.0% from $169.8M a year earlier
- Net income
- $902K
- compared with a net loss of $4.31M a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended March 31, 2026
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
Commission file number 001-34365
(Exact name of Registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
(Address of principal executive offices) | (Zip Code) | ||||
(614 ) 289-5360
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ¨
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |||||||||||
| þ | Smaller reporting company | |||||||||||||
| Emerging growth company | ||||||||||||||
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ | |||||||||||||
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
The number of shares outstanding of the Registrant’s common stock, par value $.01 per share, at May 5, 2026 was 36,257,950 shares.
COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
QUARTERLY REPORT ON FORM 10-Q
| PART I FINANCIAL INFORMATION | |||||
| PART II OTHER INFORMATION | |||||
i
PART I. FINANCIAL INFORMATION
ITEM 1 – FINANCIAL STATEMENTS
COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| (Unaudited) (In thousands, except per share amounts) | |||||||||||||||||||||||
| Revenues | $ | $ | |||||||||||||||||||||
| Cost of revenues | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Selling, general and administrative expenses | |||||||||||||||||||||||
| Gain on sale of assets | ( | ||||||||||||||||||||||
| Operating income | |||||||||||||||||||||||
| Other (income) expense | ( | ||||||||||||||||||||||
| Warrant expense | |||||||||||||||||||||||
| Loss on extinguishment of debt | |||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||
| Income (loss) before provision for income taxes | ( | ||||||||||||||||||||||
| Provision for income taxes | |||||||||||||||||||||||
| Net income (loss) from continuing operations | ( | ||||||||||||||||||||||
| Net income (loss) from discontinued operations - Note 18 | ( | ||||||||||||||||||||||
| Net income (loss) | $ | $ | ( | ||||||||||||||||||||
| Earnings (loss) per Common Share: | |||||||||||||||||||||||
| Basic earnings (loss) per share | |||||||||||||||||||||||
| Income (loss) from continuing operations | $ | $ | ( | ||||||||||||||||||||
| Income (loss) from discontinued operations | $ | $ | ( | ||||||||||||||||||||
| Diluted earnings (loss) per share | |||||||||||||||||||||||
| Income (loss) from continuing operations | $ | $ | ( | ||||||||||||||||||||
| Income (loss) from discontinued operations | $ | $ | ( | ||||||||||||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
1
COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| (Unaudited) (In thousands) | |||||||||||||||||||||||
| Net income (loss) | $ | $ | ( | ||||||||||||||||||||
| Other comprehensive income (loss): | |||||||||||||||||||||||
| Foreign currency exchange translation adjustments | ( | ||||||||||||||||||||||
| Minimum pension liability, net of tax | ( | ( | |||||||||||||||||||||
| Derivative instruments, net of tax | ( | ||||||||||||||||||||||
| Other comprehensive income (loss) | ( | ||||||||||||||||||||||
| Comprehensive income (loss) | $ | ( | $ | ||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2
COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| March 31, 2026 | December 31, 2025 | ||||||||||
| (Unaudited) | |||||||||||
(In thousands, except share and per share amounts) | |||||||||||
| ASSETS | |||||||||||
| Current Assets: | |||||||||||
| Cash | $ | $ | |||||||||
Accounts receivable, net of allowances of $ | |||||||||||
| Inventories | |||||||||||
| Other current assets | |||||||||||
| Total current assets | |||||||||||
| Property, plant and equipment, net | |||||||||||
Intangible assets, net of accumulated amortization of $ | |||||||||||
| Deferred income taxes, net | |||||||||||
| Other assets, net | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued liabilities and other | |||||||||||
| Current portion of long-term debt and short-term debt | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt | |||||||||||
| Pension and other post-retirement benefits | |||||||||||
| Other long-term liabilities | |||||||||||
| Total liabilities | |||||||||||
| Stockholders’ equity: | |||||||||||
Preferred stock, $ | $ | $ | |||||||||
Common stock, $ | |||||||||||
Treasury stock, at cost: | ( | ( | |||||||||
| Additional paid-in capital | |||||||||||
| Retained deficit | ( | ( | |||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Total stockholders’ equity | |||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | $ | |||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| (Unaudited) | |||||||||||
| (In thousands) | |||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
| Net income (loss) | $ | $ | ( | ||||||||
| Adjustments to reconcile net income to cash flows from operating activities from continuing operations: | |||||||||||
| Depreciation and amortization | |||||||||||
| Noncash amortization of debt financing costs | |||||||||||
| Share-based compensation expense | |||||||||||
| Deferred income taxes | ( | ||||||||||
| Non-cash income on derivative contracts | ( | ( | |||||||||
| Non-cash loss on warrants | |||||||||||
| Gain on sale of assets | ( | ||||||||||
| Loss on extinguishment of debt | |||||||||||
| Change in other operating items: | |||||||||||
| Accounts receivable | ( | ( | |||||||||
| Inventories | ( | ||||||||||
| Prepaid expenses | ( | ( | |||||||||
| Accounts payable | |||||||||||
| Other operating activities, net | |||||||||||
| Net cash provided by (used in) operating activities | ( | ||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
| Purchases of property, plant and equipment | ( | ( | |||||||||
| Proceeds from disposal/sale of property, plant and equipment | |||||||||||
| Net cash provided by (used in) investing activities | ( | ||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
| Repayment of Term Loan due 2030 | ( | ||||||||||
| Repayment of prior revolving credit facility | ( | ||||||||||
| Repayment under ABL revolving credit facility due 2030 | ( | ||||||||||
| Borrowings under China credit facility | |||||||||||
| Repayment of China credit facility | ( | ||||||||||
| Surrender of shares to pay withholding taxes | ( | ||||||||||
| Prepayment premium and make-whole interest payment | ( | ||||||||||
| Other financing activities | ( | ( | |||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| EFFECT OF CURRENCY EXCHANGE RATE CHANGES ON CASH | ( | ||||||||||
| NET DECREASE IN CASH | ( | ( | |||||||||
| CASH: | |||||||||||
| Beginning of period | |||||||||||
| End of period | $ | $ | |||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
| Common Stock | Treasury Stock | Additional Paid-In Capital | Retained Deficit | Accumulated Other Comp. Loss | Total CVG Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
| (Unaudited) (In thousands, except share amounts) | |||||||||||||||||||||||||||||||||||||||||
| Balance - December 31, 2024 | $ | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||
| Share-based compensation expense | ( | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Net loss from continuing operations for the period | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
| Net loss from discontinued operation for the period | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Balance - March 31, 2025 | $ | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||
| Balance - December 31, 2025 | $ | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||
| Share-based compensation expense | ( | — | — | ||||||||||||||||||||||||||||||||||||||
| Net income from continuing operations for the period | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
| Balance - March 31, 2026 | $ | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Amounts in thousands, except for share and per share amounts and where specifically disclosed)
1. Description of Business and Basis of Presentation
Commercial Vehicle Group, Inc. and its subsidiaries, is a global provider of systems, assemblies and components to global commercial vehicle markets and electric vehicle markets. References herein to the "Company", "CVG", "we", "our", or "us" refer to Commercial Vehicle Group, Inc. and its subsidiaries.
We have manufacturing operations in the United States, Mexico, China, United Kingdom, Czech Republic, Ukraine Morocco,, Thailand, India and Australia. Our products are primarily sold in North America, Europe, and the Asia-Pacific region.
We primarily manufacture customized products to meet the requirements of our customers. We believe our products are used by a majority of the North American Commercial Truck manufacturers, many construction and agricultural vehicle original equipment manufacturers ("OEMs"), parts and service dealers, and distributors.
The unaudited condensed consolidated interim financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") in the United States of America and the rules and regulations of the Securities and Exchange Commission and include the accounts of the Company and its subsidiaries. Except as disclosed within these condensed notes to unaudited quarterly consolidated financial statements, the adjustments made were of a normal, recurring nature. Certain information and footnote disclosures normally included in our annual consolidated financial statements have been condensed or omitted. Additionally, certain prior period amounts related to discontinued operations have been reclassified to conform to footnote presentation for the current year, as further described in this section.
The preparation of financial statements in conformity with GAAP in the United States requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. These estimates and assumptions are based on management's best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. We adjust such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in these estimates resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods.
2. Recently Issued Accounting Pronouncements
In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income-Expense Disaggregation (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU updates improve financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. This information is generally not presented in the financial statements today. The ASU also requires disclosure of the total amount of selling expenses and our definition of selling expenses. The standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact of adopting this ASU on our consolidated financial statements and related disclosures.
In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. This ASU clarifies interim disclosure requirements and provides a new disclosure principle for reporting material events occurring after the most recent fiscal year. This standard is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years, with early adoption permitted. We are currently evaluating the impact of adopting this ASU on our consolidated financial statements and related disclosures.
6
In December 2025, the FASB issued ASU 2025-12, Codification Improvements. This ASU updates a broad range of Topics arising from technical corrections, unintended application of the Codification, clarifications, and other minor improvements that has a wide application to any entity affected by accounting guidance. The amendments make the codification easier to understand and apply. The standard is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years, with early adoption permitted. We are currently evaluating the impact of adopting this ASU on our consolidated financial statements and related disclosures.
3. Revenue Recognition
We had outstanding customer accounts receivable, net of allowances, of $100.9 million as of March 31, 2026 and $86.3 million as of December 31, 2025. We generally do not have material other assets or liabilities associated with customer arrangements.
Revenue Disaggregation - The following is the composition, by product category, of our revenues:
| Three Months Ended March 31, 2026 | |||||||||||||||||||||||
| Global Seating | Global Electrical Systems | Trim Systems and Components | Total | ||||||||||||||||||||
| Seats | $ | $ | $ | $ | |||||||||||||||||||
| Electrical wire harnesses, panels and assemblies | |||||||||||||||||||||||
| Plastic & Trim components | |||||||||||||||||||||||
| Mirrors, wipers and controls | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
| Three Months Ended March 31, 2025 | |||||||||||||||||||||||
| Global Seating | Global Electrical Systems | Trim Systems and Components | Total | ||||||||||||||||||||
| Seats | $ | $ | $ | $ | |||||||||||||||||||
| Electrical wire harnesses, panels and assemblies | |||||||||||||||||||||||
| Plastic & Trim components | |||||||||||||||||||||||
| Mirrors, wipers and controls | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
7
4. Debt
Debt consisted of the following:
| March 31, 2026 | December 31, 2025 | ||||||||||
| Term Loan facility | $ | $ | |||||||||
| ABL Revolving credit facility | |||||||||||
| Unamortized value of warrants | ( | ( | |||||||||
| Unamortized debt discount and issuance costs | ( | ( | |||||||||
| $ | $ | ||||||||||
| Less: current portion of long-term debt | ( | ( | |||||||||
| Total long-term debt, net of current portion | $ | $ | |||||||||
| Short-term debt - China credit facility | $ | ||||||||||
Term Loan facility
On June 27, 2025, the Company entered into a $95 million secured credit facility (the “Term Loan”) pursuant to a term loan and security agreement with TCW Asset Management Company LLC (“TCW Management”), as administrative agent, and other lender parties thereto. All obligations of the Company under the Term Loan are unconditionally guaranteed by the Company and certain of its subsidiaries. The Company and each of its guarantor subsidiaries have granted liens in substantially all of their property to secure their respective obligations under the Term Loan, guaranties and related documents. The Term Loan matures on June 27, 2030.
The proceeds of the Term Loan were used, together with cash on hand of the Company, to (a) pay down the then existing term loan and revolving credit facilities due 2027 of the Company with Bank of America, N.A. as administrative agent (the “Prior Credit Facilities"), (b) pay related transaction costs, fees and expenses incurred in connection therewith, and (c) for working capital and other lawful corporate purposes of the Company.
Interest Rates and Fees
Amounts outstanding under the Term Loan accrue interest at a per annum rate based on the consolidated total leverage ratio ranging from SOFR plus 8.75 % with a leverage ratio < 3.50 x to SOFR plus 10.75 % with a leverage ratio > 6.25 x. The interest rate was set at SOFR plus 9.75 % through September 2025. At the Company’s option, interest may be paid at the base rate plus 9.75 % with a leverage ratio < 3.50 x to base rate plus 11.75 % with a leverage ratio > 6.25 x where the base rate is the greatest of (1) 3.0 %, (2) Federal Funds rate plus 0.5 %, (3) SOFR plus 1.0 %, or (4) Prime rate. The base rate margin was initially set at base rate plus 10.75 %. In connection with the initial funding of the Term Loan the Company paid to the Term Loan lenders a fee equal to 3.0 % of the Term Loan amount.
Covenants and Other Terms
The Term Loan contains a maximum total leverage ratio covenant, a maximum capital expenditure covenant, an average liquidity covenant, and other customary restrictive covenants, including, without limitation, limitations on the ability of the Company and its subsidiaries to incur additional debt and guarantees; grant certain liens on assets; pay dividends or make certain other distributions; make certain investments or acquisitions; dispose of certain assets; make payments on certain indebtedness; merge, combine with any other person or liquidate; amend organizational documents; file consolidated tax returns with entities other than the Company and its subsidiaries; make material changes in accounting treatment or reporting practices; enter into certain restrictive agreements; enter into certain hedging agreements; engage in transactions with affiliates; enter into certain employee benefit plans; amend subordinated debt; and other matters customarily included in senior secured loan agreements. The consolidated total leverage ratio covenant did not exceed 7.25 to 1.00 for the quarter ended September 30, 2025; 6.50 to 1.00 for the quarter ended December 31, 2025; 6.00 to 1.00 for the quarter ended March 31, 2026. The consolidated total leverage ratio covenant may not exceed 5.25 to 1.00 for the quarter ending June 30, 2026; 5.00 to 1.00 for the quarter ending September 30, 2026; 4.75 to 1.00 for the quarter ending December 31, 2026; 4.50 to 1.00 for the quarter ending March 31, 2027; 4.25 to 1.00 for the quarter ending June 30, 2027; and 4.00 to 1.00 for the quarter ending September 30, 2027 and each fiscal quarter thereafter. The Term Loan also contains customary reporting and other affirmative covenants. We were in compliance with these covenants as of March 31, 2026.
The Term Loan contains customary events of default, including, without limitation, nonpayment of obligations under the Term Loan when due; material inaccuracy of representations and warranties; violation of covenants in the Term Loan and certain other documents executed in connection therewith; breach or default of agreements related to material debt; revocation or attempted revocation of guarantees; denial of the validity or enforceability of the loan documents or failure of the loan
8
documents to be in full force and effect; certain material judgments; certain events of bankruptcy or insolvency; certain Employee Retirement Income Securities Act events; loss, theft, damage or destruction of collateral; and a change in control of the Company. Certain of the defaults are subject to exceptions, materiality qualifiers, grace periods and baskets customary for credit facilities of this type.
Term Loan amortization payments are to be made quarterly in an amount equal to 0.25 % of the original principal balance of the Term Loan, stepping up to 1.25 % from and after June 30, 2027.
The Term Loan requires the Company to make mandatory prepayments (subject to reinvestment rights) with the proceeds of certain asset dispositions and upon the receipt of certain extraordinary payments (including, without limitation, insurance or condemnation proceeds, tax refunds, and judgments). In addition, the Company is required to make annual excess cash flow prepayments commencing after fiscal 2026 financial results are final, and mandatory prepayments with proceeds of debt not permitted under the Term Loan. During the quarter ended March 31, 2026 the Company made a mandatory prepayment of $14.6 million as the result of a sale and leaseback transaction.
Voluntary prepayment of amounts outstanding under the Term Loan are permitted at any time, subject to a make-whole amount for the first year immediately following the initial funding of the Term Loan, a 4 % premium for the second year and a 2 % premium for the third year and the payment of customary breakage costs, if applicable.
In connection with entering into the Term Loan due 2030, the Company issued to affiliates of TCW Management five-year warrants for the purchase of up to an aggregate of 3,934,776 shares of the Company’s common stock, issued in two equal tranches. See Note 5, Fair Value Measurement, for terms of these warrants.
Amendment
On December 22, 2025, the Company entered into an immaterial amendment to the Term Loan. The amendment enacted certain technical changes in connection with the provision of non-U.S. collateral securing the Term Loan.
ABL Revolving Credit Facility
On June 27, 2025, the Company and certain of its subsidiaries, as co-borrowers entered into a loan and security agreement (the “ABL Revolving Credit Facility”) with Bank of America, N.A. as agent, and certain financial institutions as lenders, which agreement governs the Company’s revolving credit facility and amends and restates the Company’s Prior Revolving Credit Facility due 2027. The Company and each of its co-borrower subsidiaries are jointly and severally liable for all obligations arising under the ABL Revolving Credit Facility and have granted liens in substantially all of their property to secure their respective obligations under the revolving loan agreement and related documents. The ABL Revolving Credit Facility matures on June 27, 2030, springing to 91 days prior to the maturity of the Term Loan or third-party subordinated debt.
In accordance with the terms of the ABL Revolving Credit Facility the Company and the other named borrowers thereunder are entitled (subject to the terms and conditions described therein) to request loans and other financial accommodations in an amount equal to the lesser of $115.0 million and a borrowing base composed of accounts receivable and inventory. The ABL Revolving Credit Facility is comprised of a US subfacility of $100.0 million and a UK subfacility of $15.0 million, in each case subject to availability under the borrowing base. The US subfacility further has a first-in-last-out tranche equal to the lesser of $12.5 million and its borrowing base. The Company can increase the size of the revolving commitments thereunder by an incremental $50.0 million, subject to the consent of the lenders providing the incremental commitments. Up to an aggregate of $10.0 million is available to the Company and the other borrowers for the issuance of letters of credit, which reduces availability under the ABL Revolving Credit Facility. Borrowings are available in US Dollars, Pounds Sterling and Euros.
Interest Rates and Commitment Fees
Amounts outstanding under the ABL Revolving Credit Facility accrue interest at a per annum rate based on SOFR, SONIA or EURIBOR, as applicable for the currency of the loan, with margins based on the average daily availability ranging from 1.50 % if average daily availability is greater than $50 million to 2.00 % if average daily availability is less than $30 million. The interest rate was initially set at SOFR plus 1.75 %. The first-in-last-out tranche accrues interest at a 1 % higher rate. At the Company’s option, interest may be paid at the base rate. The base rate spread ranges from 0.50 % if average daily availability is greater than $50 million to 1.00 % if average daily availability is less than $30 million.
The Company will pay an unused fee to the lenders equal to 0.25 % per annum of the unused amounts under the ABL Revolving Credit Facility.
Covenants and Other Terms
The ABL Revolving Credit Facility includes a springing minimum fixed charge coverage ratio of 1.0 :1.0, calculated when availability is less than the greater of $10.0 million and 10 % of the revolver commitments. The fixed charge coverage ratio is determined with respect to approved obligors only.
9
The ABL Revolving Credit Facility contains customary restrictive covenants, including, without limitation, limitations on the ability of the Company and its subsidiaries to incur additional debt and guarantees; grant liens on assets; pay dividends or make other distributions; make investments or acquisitions; dispose of assets; make payments on certain indebtedness; merge, combine with any other person or liquidate; amend organizational documents; file consolidated tax returns with entities other than the Company and its subsidiaries; make material changes in accounting treatment or reporting practices; enter into restrictive agreements; enter into hedging agreements; engage in transactions with affiliates; enter into certain employee benefit plans; amend subordinated debt; and other matters customarily included in senior secured loan agreements. The ABL Revolving Credit Facility also contains customary reporting and other affirmative covenants. We were in compliance with these covenants as of March 31, 2026.
The ABL Revolving Credit Facility contains customary events of default, including, without limitation, nonpayment of obligations under the ABL Revolving Credit Facility when due; material inaccuracy of representations and warranties; violation of covenants in the ABL Revolving Credit Facility and certain other documents executed in connection therewith; breach or default of agreements related to material debt; revocation or attempted revocation of guarantees; denial of the validity or enforceability of the loan documents or failure of the loan documents to be in full force and effect; certain material judgments; certain events of bankruptcy or insolvency; certain Employee Retirement Income Securities Act events; loss, theft, damage or destruction of collateral; and a change in control of the Company. Certain of the defaults are subject to exceptions, materiality qualifiers, grace periods and baskets customary for credit facilities of this type.
Voluntary prepayments of amounts outstanding under the ABL Revolving Credit Facility are permitted at any time, without premium or penalty, other than in respect of customary breakage costs, if applicable.
The ABL Revolving Credit Facility requires the borrowers to make mandatory prepayments with the receipt of any proceeds of certain insurance or condemnation awards paid in respect of revolving credit priority collateral.
At March 31, 2026, we had $16.1 million of borrowings under the ABL Revolving Credit Facility, outstanding letters of credit of $3.5 million and availability of $95.4 million (subject to customary borrowing base and other conditions). Combined with availability under our China Credit Facility (described below) of approximately $4.3 million, total consolidated availability was $99.7 million at March 31, 2026. The unamortized deferred financing fees associated with the ABL Revolving Credit Facility of $2.6 million and $2.5 million as of March 31, 2026 and December 31, 2025, respectively, are being amortized over the remaining life of the ABL Revolving Credit Facility. At December 31, 2025, we had $16.8 million borrowings under the ABL Revolving Credit Facility and we had outstanding letters of credit of $2.1 million.
Amendment
On December 22, 2025, the Company entered into an immaterial amendment to the ABL Revolving Credit Facility. The amendment enacted certain technical changes in connection with the provision of non-U.S. collateral securing the ABL Revolving Credit Facility.
See Note 15, Commitments and Contingencies, for the future minimum principal payments due on long-term debt for the next five years.
Foreign Facility
During 2023,we established a working capital credit facility in China consisting of a line of credit with contractual maturity of less than one year (the "China Credit Facility"). The Company periodically renews the China Credit Facility; however, renewal is subject to lender approval and is not contractually committed beyond the current maturity date. The China Credit Facility was renewed in the quarter ended December 31, 2025, with availability of approximately $7.2 million (denominated in the local currency). We utilize the China Credit Facility to meet local working capital demands, fund letters of credit and bank guarantees, and support other short-term cash requirements of our China operations. We had $2.9 million outstanding borrowings under the China Credit Facility as of March 31, 2026 and $1.4 million outstanding borrowings as of December 31, 2025. At March 31, 2026, we had $4.3 million of availability under the China Credit Facility.
Cash Paid for Interest
For the three months ended March 31, 2026 and 2025, cash payments for interest were $3.4 million and $2.8 million, respectively.
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5. Intangible Assets
Our definite-lived intangible assets were comprised of the following:
| March 31, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||
| Weighted- Average Amortization Period | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||||||||||||||||||
| Trademarks/tradenames | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||
| Customer relationships | ( | ( | |||||||||||||||||||||||||||||||||||||||
| $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||
6. Fair Value Measurement
Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels, and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:
Level 1 - Unadjusted quoted prices in active markets for identical assets and liabilities.
Level 2 - Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.
Level 3 - Significant unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.
Our financial instruments consist of cash, accounts receivable, accounts payable, accrued liabilities, pension assets and liabilities. The carrying value of these instruments approximates fair value as a result of the short duration of such instruments or due to the variability of the interest cost associated with such instruments.
Recurring Measurements
Foreign Currency Forward Exchange Contracts. Our derivative assets and liabilities represent foreign exchange contracts that are measured at fair value using observable market inputs such as forward rates, interest rates, our own credit risk and counterparty credit risk. Based on the utilization of these inputs, the derivative assets and liabilities are classified as Level 2. To manage our risk for transactions denominated in Mexican Pesos, Czech Crown, and Ukrainian Hryvnia, we have entered into forward exchange contracts that are designated as cash flow hedge instruments, which are recorded in the Condensed Consolidated Balance Sheets at fair value. The gains and losses as a result of the changes in fair value of the hedge contract for transactions denominated in Mexican Pesos are deferred in accumulated other comprehensive loss and recognized in cost of revenues in the period the related hedge transactions are settled. As of March 31, 2026, hedge contracts for transactions denominated in Czech Crown were not designated as hedging instruments; therefore, they are marked-to-market and the fair value of agreements is recorded in the Condensed Consolidated Balance Sheets with the offsetting gains and losses recognized in other (income) expense and recognized in cost of revenues in the period the related hedge transactions are settled in the Condensed Consolidated Statements of Operations.
Interest Rate Swaps. As of March 31, 2025, the Company settled its interest rate swap and received cash proceeds of $0.6 million. The gain on the swap settlement was recorded in Other comprehensive income (loss) and is being recognized over the life of the hedged transactions. As of March 31, 2026, there was no interest rate swap outstanding.
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Stock Warrants Issued in Connection with Long-Term Debt — In connection with entering into the Term Loan due 2030, the Company issued to affiliates of TCW Management five-year warrants for the purchase of up to an aggregate of 3,934,776 shares of the Company’s common stock, issued in two equal tranches. The tranches have an exercise price of $1.52 and $2.07 per share, respectively. Until the fourth anniversary after issuance, the Company has the right to repurchase up to 50 % of each tranche of warrants at a price equal to $1.40 or $1.00 per share, respectively, above the applicable exercise price. Upon a refinancing of the Term Loan, the holders of the warrants can require the Company to repurchase up to 50 % of each tranche at a price equal to the per share price of the Company's common stock at the time of repurchase less the exercise price. The warrants contain anti-dilution adjustments that may result in a change in the number of shares of common stock issuable upon exercise. The Company also has provided TCW Management with certain information and registration rights, including filing a registration statement within 45 days to register the resale of the shares underlying the warrants, pursuant to an Investor Rights Agreement.
As of March 31, 2026 the warrants were valued at $7.5 million using the Binomial Lattice Model and were recorded in Other long-term liabilities on the Condensed Consolidated Balance Sheets with the offsetting gains and losses recognized in other (income) expense in the Condensed Consolidated Statements of Operations. Losses for the three months ended March 31, 2026 were $5.0 million.
The fair values of our financial instruments measured on a recurring basis are categorized as follows:
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Foreign exchange contract designated as hedging instruments | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Foreign exchange contract not designated as hedging instruments | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Foreign exchange contract designated as hedging instruments | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Foreign exchange contract not designated as hedging instruments | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Warrants | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
The following table summarizes the notional amount of our open foreign exchange contracts:
| March 31, 2026 | December 31, 2025 | ||||||||||||||||||||||
| U.S. $ Equivalent | U.S. $ Equivalent Fair Value | U.S. $ Equivalent | U.S. $ Equivalent Fair Value | ||||||||||||||||||||
| Commitments to buy or sell currencies - Foreign exchange contract designated as hedging instruments | $ | $ | $ | $ | |||||||||||||||||||
| Commitments to buy or sell currencies - Foreign exchange contract not designated as hedging instruments | $ | $ | $ | $ | |||||||||||||||||||
We consider the impact of our credit risk on the fair value of the contracts, as well as the ability to execute obligations under the contract.
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The following table summarizes the fair value and presentation of financial instruments in the Condensed Consolidated Balance Sheets:
| Derivative Asset | |||||||||||||||||
| Balance Sheet Location | Fair Value | ||||||||||||||||
| March 31, 2026 | December 31, 2025 | ||||||||||||||||
| Foreign exchange contract designated as hedging instruments | Other current assets | $ | $ | ||||||||||||||
| Foreign exchange contract not designated as hedging instruments | Other current assets | $ | $ | ||||||||||||||
| Derivative Liability | |||||||||||||||||
| Balance Sheet Location | Fair Value | ||||||||||||||||
| March 31, 2026 | December 31, 2025 | ||||||||||||||||
| Foreign exchange contract designated as hedging instruments | $ | $ | |||||||||||||||
| Foreign exchange contracts not designated as hedging instruments | $ | $ | |||||||||||||||
| Foreign exchange contracts not designated as hedging instruments | $ | $ | |||||||||||||||
| Warrants | Other long term liabilities | $ | $ | ||||||||||||||
| Derivative Equity | |||||||||||||||||
| Balance Sheet Location | Fair Value | ||||||||||||||||
| March 31, 2026 | December 31, 2025 | ||||||||||||||||
| Foreign exchange contracts designated as hedging instruments | Accumulated other comprehensive income (loss) | $ | $ | ||||||||||||||
| Interest rate swap agreements | Accumulated other comprehensive income | $ | $ | ||||||||||||||
The following table summarizes the effect of derivative instruments on the Condensed Consolidated Statements of Operations:
| Three Months Ended March 31, | |||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||
| Location of Gain (Loss) Recognized on Derivatives | Amount of Gain (Loss) Recognized in Income on Derivatives | ||||||||||||||||||||||||||||
| Foreign exchange contracts designated as hedging instruments | Cost of revenues | $ | $ | ( | |||||||||||||||||||||||||
| Settled interest rate swap agreements | Interest expense | $ | $ | ||||||||||||||||||||||||||
| Foreign exchange contracts not designated as hedging instruments | Other (income) expense | $ | ( | $ | |||||||||||||||||||||||||
We consider the impact of our credit risk on the fair value of the contracts, as well as our ability to honor obligations under the contract.
Other Fair Value Measurements
The fair value of long-term debt obligations is based on a fair value model utilizing observable inputs. Based on these inputs, our long-term debt fair value as disclosed was classified as Level 3 as of December 31, 2025 and March 31, 2026 due to the
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lack of observable market inputs or comparable instruments. With the refinancing of our long-term debt on June 27, 2025, the carrying values of our long-term debt obligations approximate the fair values.
The carrying amounts and fair values of our long-term debt obligations are as follows:
| March 31, 2026 | December 31, 2025 | ||||||||||||||||||||||
| Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||||||||||
Term Loan 1 | $ | $ | $ | $ | |||||||||||||||||||
| Revolving credit facility | $ | $ | $ | $ | |||||||||||||||||||
1.Presented in the Condensed Consolidated Balance Sheets as the current portion of long-term debt of $0.9 million and long-term debt of $73.6 million as of March 31, 2026 and current portion of long-term debt of $0.9 million and long-term debt of $87.2 million as of December 31, 2025.
7. Leases
The components of lease expense are as follows:
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
Operating lease cost | $ | $ | |||||||||||||||||||||
| Finance lease cost | |||||||||||||||||||||||
Short-term lease cost | |||||||||||||||||||||||
| Total lease expense | $ | $ | |||||||||||||||||||||
Supplemental balance sheet information related to leases is as follows:
| Balance Sheet Location | March 31, 2026 | December 31, 2025 | ||||||||||||
| Operating Leases | ||||||||||||||
| Right-of-use assets, net | $ | $ | ||||||||||||
| Current liabilities | ||||||||||||||
| Non-current liabilities | ||||||||||||||
| Total operating lease liabilities | $ | $ | ||||||||||||
| Finance Leases | ||||||||||||||
| Right-of-use assets, net | $ | $ | ||||||||||||
| Current liabilities | ||||||||||||||
| Non-current liabilities | ||||||||||||||
| Total finance lease liabilities | $ | $ | ||||||||||||
Cash payments on operating leases were $3.2 million and $2.8 million for the three months ended March 31, 2026 and 2025, respectively.
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Anticipated future lease costs, which are based in part on certain assumptions to approximate annual rental commitments under non-cancelable leases, are as follows:
| Operating | Financing | Total | ||||||||||||||||||
| Remainder of 2026 | $ | $ | $ | |||||||||||||||||
| 2027 | ||||||||||||||||||||
| 2028 | ||||||||||||||||||||
| 2029 | ||||||||||||||||||||
| 2030 | ||||||||||||||||||||
| Thereafter | ||||||||||||||||||||
| Total lease payments | $ | $ | $ | |||||||||||||||||
| Less: Imputed interest | ( | ( | ( | |||||||||||||||||
| Present value of lease liabilities | $ | $ | $ | |||||||||||||||||
8. Income Taxes
We recorded a $1.9 million tax provision, or 68 % effective tax rate for the three months ended March 31, 2026, compared to a $2.1 million tax provision, or (207 )% effective tax rate for the three months ended March 31, 2025. The effective tax rate is impacted by the mix of the Company's profitable foreign operations and losses in the US while maintaining its full valuation allowance position on U.S. deferred tax assets. Income tax expense is based on an estimated annual effective tax rate, which requires management to make its best estimate of annual pretax income or loss. During the year, management regularly updates forecasted annual pretax results for the various countries in which the Company operates based on changes in factors such as prices, shipments, product mix, material inflation and manufacturing operations. To the extent that actual 2026 pretax results for U.S. and foreign income or loss vary from estimates, the actual income tax expense recognized in 2026 could be different from the forecasted amount used to estimate the income tax expense for the three months ended March 31, 2026.
For the three months ended March 31, 2026 and 2025, cash paid for taxes, net of refunds received, were $1.1 million and $0.8 million, respectively.
9. Pension and Other Post-Retirement Benefit Plans
The components of net periodic (benefit) cost related to pension and other post-retirement benefit plans is as follows:
| Non-U.S. Pension Plan | |||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||||
| Interest cost | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Expected return on plan assets | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Amortization of prior service cost | |||||||||||||||||||||||||||||||||||||||||||||||
| Recognized actuarial loss | |||||||||||||||||||||||||||||||||||||||||||||||
| Net cost | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Net periodic cost components, not inclusive of service costs, are recognized in other (income) expense within the Condensed Consolidated Statements of Operations.
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10. Performance Awards
The Company made awards, defined as cash, shares or other awards, to employees under the Amended and Restated Commercial Vehicle Group, Inc. 2020 Equity Incentive Plan (the “Amended and Restated 2020 EIP”). Effective May 15, 2025, the stockholders of the Company approved the Amended and Restated 2020 Equity Incentive Plan.
The following table summarizes performance awards granted in the form of cash awards under the equity incentive plans:
| Amount | ||||||||
| Adjusted Award Value at December 31, 2025 | $ | |||||||
| New grants | ||||||||
| Forfeitures | ( | |||||||
| Adjustments | ||||||||
| Payments | ( | |||||||
| Adjusted Award Value at March 31, 2026 | $ | |||||||
Unrecognized compensation expense was $1.6 million and $0.2 million as of March 31, 2026 and 2025, respectively.
11. Share-Based Compensation
The company's outstanding share-based compensation is comprised solely of restricted stock awards and performance stock awards to be settled in stock.
As of March 31, 2026, there was approximately $4.0 million of unrecognized compensation expense related to unvested share-based compensation arrangements granted under our equity incentive plans. This expense is subject to future adjustments and forfeitures and will be recognized on a straight-line basis over the remaining period listed above for each grant.
A summary of the status of our restricted stock awards as of March 31, 2026 and changes during the three months ended March 31, 2026, are presented below:
| 2026 | |||||||||||
| Shares (in thousands) | Weighted- Average Grant-Date Fair Value | ||||||||||
| Unvested - December 31, 2025 | $ | ||||||||||
| Granted | |||||||||||
| Vested | ( | ( | |||||||||
| Forfeited | ( | ||||||||||
| Unvested - March 31, 2026 | $ | ||||||||||
As of March 31, 2026, a total of 0.4 million shares were available for future grants from the shares authorized for award under our amended and restated 2020 Equity Incentive Plan, including cumulative forfeitures.
12. Stockholders’ Equity
Common Stock — Our authorized capital stock consists of 60,000,000 0.01 34,552,217 34,185,682
Preferred Stock — Our authorized capital stock also consists of 5,000,000 0.01 no
Earnings (Loss) Per Share — Basic earnings (loss) per share is determined by dividing net income (loss) by the weighted average number of common shares outstanding during the year. Diluted earnings (loss) per share presented is determined by
16
dividing net income (loss) by the weighted average number of common shares and potential common shares outstanding during the period as determined by the treasury stock method. Potential common shares are included in the diluted earnings per share calculation when dilutive.
Diluted earnings (loss) per share for the three months ended March 31, 2026 and 2025 includes the effect of potential common shares issuable when dilutive, and is as follows:
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| Net income (loss) | $ | $ | ( | |||||||||||||||||||||||
| Net income (loss) from continuing operations | ( | |||||||||||||||||||||||||
| Net income (loss) from discontinued operations | ( | |||||||||||||||||||||||||
| Weighted average number of common shares outstanding (in '000s) | ||||||||||||||||||||||||||
| Dilutive effect of restricted stock grants after application of the Treasury Stock Method (in '000s) | ||||||||||||||||||||||||||
| Dilutive shares outstanding | ||||||||||||||||||||||||||
| Basic earnings (loss) per share from continuing operations | $ | $ | ( | |||||||||||||||||||||||
| Basic earnings (loss) per share from discontinued operations | $ | $ | ( | |||||||||||||||||||||||
| Diluted earnings (loss) per share from continuing operations | $ | $ | ( | |||||||||||||||||||||||
| Diluted earnings (loss) per share from discontinued operations | $ | $ | ( | |||||||||||||||||||||||
13. Other Comprehensive Income (Loss)
The after-tax changes in accumulated other comprehensive income (loss), are as follows:
| Foreign currency translation adjustment | Pension and post-retirement benefits plans | Derivative instruments | Accumulated other comprehensive income (loss) | ||||||||||||||||||||
| Balance - December 31, 2025 | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
| Net current period change | ( | ( | ( | ||||||||||||||||||||
| Amounts reclassified into earnings | ( | ( | |||||||||||||||||||||
| Balance - March 31, 2026 | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
| Foreign currency translation adjustment | Pension and post-retirement benefit plans | Derivative instruments | Accumulated other comprehensive income (loss) | ||||||||||||||||||||
| Balance - December 31, 2024 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Net current period change | ( | ||||||||||||||||||||||
| Amounts reclassified into earnings | |||||||||||||||||||||||
| Balance - March 31, 2025 | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
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The related tax effects allocated to each component of other comprehensive income (loss) are as follows:
| Three Months Ended March 31, 2026 | |||||||||||||||||||||||||||||||||||
| Before Tax Amount | Tax Expense | After Tax Amount | |||||||||||||||||||||||||||||||||
| Net current period change | |||||||||||||||||||||||||||||||||||
| Cumulative translation adjustment | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||
| Net actuarial gain (loss) and prior service credit | ( | ( | |||||||||||||||||||||||||||||||||
| Derivative instruments | |||||||||||||||||||||||||||||||||||
| Net unrealized gain (loss) | ( | ( | |||||||||||||||||||||||||||||||||
| Amounts reclassified into earnings: | |||||||||||||||||||||||||||||||||||
| Actuarial gain and prior service cost | |||||||||||||||||||||||||||||||||||
| Derivative instruments | ( | ( | |||||||||||||||||||||||||||||||||
| Net realized gain | ( | ( | |||||||||||||||||||||||||||||||||
| Total other comprehensive income (loss) | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||
| Three Months Ended March 31, 2025 | |||||||||||||||||||||||||||||||||||
| Before Tax Amount | Tax Expense | After Tax Amount | |||||||||||||||||||||||||||||||||
| Net current period change | |||||||||||||||||||||||||||||||||||
| Cumulative translation adjustment | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Net actuarial gain (loss) and prior service credit | ( | ( | |||||||||||||||||||||||||||||||||
| Derivative instruments | ( | ||||||||||||||||||||||||||||||||||
| Net unrealized gain (loss) | ( | ||||||||||||||||||||||||||||||||||
| Amounts reclassified into earnings: | |||||||||||||||||||||||||||||||||||
| Actuarial gain and prior service cost | |||||||||||||||||||||||||||||||||||
| Derivative instruments | |||||||||||||||||||||||||||||||||||
| Net realized gain (loss) | |||||||||||||||||||||||||||||||||||
| Total other comprehensive income (loss) | $ | $ | ( | $ | |||||||||||||||||||||||||||||||
14. Cost Reduction and Manufacturing Capacity Rationalization
The Company's restructuring program seeks to align cost structure to support margin expansion. The program includes workforce reductions and footprint optimization across segments.
The changes in accrued restructuring balances are as follows:
| Global Seating | Global Electrical Systems | Trim Systems and Components | Corporate/Other | Total | |||||||||||||||||||||||||||||||
| December 31, 2025 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| New charges | $ | $ | |||||||||||||||||||||||||||||||||
| Payments and other adjustments | ( | $ | ( | $ | ( | ( | ( | ||||||||||||||||||||||||||||
| March 31, 2026 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
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| Global Seating | Global Electrical Systems | Trim Systems and Components | Corporate/ Other | Total | |||||||||||||||||||||||||||||||
| December 31, 2024 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| New charges | |||||||||||||||||||||||||||||||||||
| Payments and other adjustments | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||
| March 31, 2025 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
Of the $1.2 million costs incurred in the three months ended March 31, 2026 for restructuring, $1.2 million related to headcount reductions and zero related to facility exit and other costs. Of the $1.2 million costs incurred, $1.2 million were recorded in .
15. Commitments and Contingencies
Leases - As disclosed in Note 7, Leases, we lease office, warehouse and manufacturing space and equipment under non-cancelable operating lease agreements that generally require us to pay maintenance, insurance, taxes and other expenses in addition to annual rental fees. As of March 31, 2026, our equipment leases did not provide for any material guarantee of a specified portion of residual values.
Guarantees - Costs associated with guarantees are accrued when it is probable that a liability has been incurred and the amount can be reasonably estimated. The most likely cost to be incurred is accrued based on an evaluation of available facts; where no amount within a range of estimates is more likely, the minimum is accrued. As of March 31, 2026 and 2025, we had no such guarantees.
Litigation - We are subject to various legal proceedings and claims arising in the ordinary course of business, including but not limited to product liability claims, customer and supplier disputes, service provider disputes, examinations by taxing authorities, employment disputes, workers’ compensation claims, unfair labor practice charges, OSHA investigations, intellectual property disputes and environmental claims arising out of the conduct of our businesses.
Management believes that the Company maintains adequate insurance and that we have established reserves for issues that are probable and estimable in amounts that are adequate to cover reasonable adverse judgments not covered by insurance. Based upon the information available to management and discussions with legal counsel, it is the opinion of management that the ultimate outcome of the various legal actions and claims that are incidental to our business are not expected to have a material adverse impact on the consolidated financial position, results of operations, equity or cash flows; however, such matters are subject to many uncertainties and the outcomes of individual matters are not predictable with any degree of assurance.
Warranty - We are subject to warranty claims for products that fail to perform as expected due to design or manufacturing deficiencies. Depending on the terms under which we supply products to our customers, a customer may hold us responsible for some or all of the repair or replacement costs of defective products when the product supplied did not perform as represented. Our policy is to record provisions for estimated future customer warranty costs based on historical trends and for specific claims. These amounts, as they relate to the periods ended March 31, 2026 and December 31, 2025, are included within accrued liabilities and other in the accompanying Condensed Consolidated Balance Sheets.
On July 24, 2023, one of our customers issued a voluntary safety recall related to certain wiper system components supplied by us. On October 6, 2025, one of our customers issued a safety recall related to certain truck cabs produced in our cab manufacturing facility. The facility was sold during 2024 and reported as discontinued operations. To the extent a loss occurs that is attributed to us, we believe that we have reasonable levels of insurance coverage to mitigate recall exposure risk. It is reasonably possible that we will incur additional losses and fees above the amount accrued for warranty claims but we cannot estimate a range of such reasonably possible losses or fees related to these claims at this time. There are no assurances, however, that settlements reached and/or adverse judgments received, if any, will not exceed amounts normally accrued.
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The following presents a summary of the warranty provision for the three months ended March 31, 2026:
| Balance - December 31, 2025 | $ | ||||
| Provision for warranty claims | |||||
| Deduction for payments made and other adjustments | ( | ||||
| Balance - March 31, 2026 | $ | ||||
Debt Payments - As disclosed in Note 4, Debt, the Term Loan requires the Company to repay a fixed amount of principal on a quarterly basis and make voluntary prepayments that coincide with certain events.
The following table provides future minimum principal payments due on long-term debt for the next five years. The existing long-term debt matures in 2030; no payments are due thereafter:
| Total | |||||||||||||||||
| Remainder of 2026 | $ | ||||||||||||||||
| 2027 | $ | ||||||||||||||||
| 2028 | $ | ||||||||||||||||
| 2029 | $ | ||||||||||||||||
| 2030 and thereafter | $ | ||||||||||||||||
16. Segment Reporting
Our President and Chief Executive Officer is the Company’s chief operating decision maker (“CODM”). The CODM uses segment operating income compared to historical results, budgets, and forecasted financial information, in order to assess segment performance and allocate operating and capital resources.
The Global Seating segment designs, manufactures and sells the following products:
•Commercial vehicle seats for the global commercial vehicle markets including heavy duty trucks, medium duty trucks, last mile delivery trucks and vans, construction and agriculture equipment in North America, Europe and Asia-Pacific. This segment includes a portion of the company’s activities in the electric vehicle market.
•Seats and components sold into the commercial vehicle channels that provide repair and refurbishing. These channels include Original Equipment Service ("OES") centers and retail distributors, and are spread across North America, Europe and Asia-Pacific.
•Office seats primarily sold into the commercial and home office furniture distribution channels in Europe and Asia-Pacific.
The Global Electrical Systems segment designs, manufactures and sells the following products:
•Cable and harness assemblies for both high and low voltage applications, control boxes, dashboard assemblies and design and engineering for these applications.
•The end markets for these products are construction, agricultural, industrial, automotive (both internal combustion and electric vehicles), truck, mining, rail, marine, power generation and the military/defense industries in North America, Europe and Asia-Pacific.
The Trim Systems and Components segment designs, manufactures and sells the following products:
•Plastic components ("Trim") primarily for the North America commercial vehicle market, MD/HD truck market and power sports markets.
•Commercial vehicle accessories including wipers, mirrors, and sensors. These products are sold both as Original Equipment and as repair products.
20
The following tables present financial information for the Company's reportable segments for the periods indicated:
| Three Months Ended March 31, 2026 | |||||||||||||||||||||||||||||
| Global Seating | Global Electrical Systems | Trim Systems and Components | Total | ||||||||||||||||||||||||||
| Revenues | $ | $ | $ | $ | |||||||||||||||||||||||||
| Cost of revenues | |||||||||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||||||||
| Selling, general & administrative expenses | |||||||||||||||||||||||||||||
| Gain on sale of assets | ( | ( | |||||||||||||||||||||||||||
Operating income (loss) 1 | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||
Corporate and other unallocated costs 2 | |||||||||||||||||||||||||||||
| Other (income) expense | |||||||||||||||||||||||||||||
| Warrant expense | |||||||||||||||||||||||||||||
| Loss on early extinguishment of debt | |||||||||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||||||||
| Income before provision for income taxes | $ | ||||||||||||||||||||||||||||
| Three Months Ended March 31, 2025 | |||||||||||||||||||||||||||||
| Global Seating | Global Electrical Systems | Trim Systems and Components | Total | ||||||||||||||||||||||||||
| Revenues | $ | $ | $ | $ | |||||||||||||||||||||||||
| Cost of revenues | |||||||||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||||||||
| Selling, general & administrative expenses | |||||||||||||||||||||||||||||
Operating income (loss) 1 | $ | $ | ( | $ | $ | ||||||||||||||||||||||||
Corporate and other unallocated costs 2 | |||||||||||||||||||||||||||||
| Other (income) expense | ( | ||||||||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||||||||
| Loss before provision for income taxes | $ | ( | |||||||||||||||||||||||||||
1.Segment operating income includes allocated corporate operating expenses associated with central services such as procurement, quality, logistics, environmental health and safety, information technology, insurance, finance, credit and collections, treasury and human resources. Operating expenses related to corporate headquarter functions are primarily allocated to each segment based on revenue contribution.
2.Unallocated corporate costs include enterprise and governance stewardship which include listing fees, audit fees, compliance costs, insurance costs, Board of Directors fees, and corporate management stock-based compensation expenses. Finally, interest expense, income taxes, and certain other items included in Other (income) expense, which are managed on a consolidated basis, are not allocated to the operating segments.
21
17. Other Financial Information
Items reported in inventories consisted of the following:
| March 31, 2026 | December 31, 2025 | ||||||||||
| Raw materials | $ | $ | |||||||||
| Work in process | |||||||||||
| Finished goods | |||||||||||
| Inventories | $ | $ | |||||||||
Items reported in property, plant, and equipment, net consisted of the following:
| March 31, 2026 | December 31, 2025 | ||||||||||
| Land and buildings | $ | $ | |||||||||
| Machinery and equipment | |||||||||||
| Construction in progress | |||||||||||
| Property, plant, and equipment, gross | |||||||||||
| Less accumulated depreciation | ( | ( | |||||||||
| Property, plant and equipment, net | $ | $ | |||||||||
Items reported in accrued expenses and other liabilities consisted of the following:
| March 31, 2026 | December 31, 2025 | ||||||||||
| Compensation and benefits | $ | $ | |||||||||
| Operating lease liabilities | |||||||||||
| Taxes payable | |||||||||||
| Accrued legal and professional fees | |||||||||||
| Derivative liabilities | |||||||||||
| Accrued freight | |||||||||||
| Warranty costs | |||||||||||
| Customer tooling projects | |||||||||||
| Other | |||||||||||
| Accrued liabilities and other | $ | $ | |||||||||
18. Discontinued Operations
The following table provides a reconciliation of the individual discontinued operations to the Condensed Consolidated Statements of Operations for the three months ended March 31, 2026 and 2025.
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Income (loss) from discontinued operations, net of tax | |||||||||||||||||||||||
| Cab structures business | $ | $ | ( | ||||||||||||||||||||
| Industrial Automation segment | ( | ||||||||||||||||||||||
| Total income (loss) from discontinued operations, net of tax | $ | $ | ( | ||||||||||||||||||||
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ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The discussion and analysis below described material changes in financial condition and results of operations as reflected in our condensed consolidated financial statements for the three months ended March 31, 2026 and 2025. This discussion and analysis should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2025 Form 10-K.
Business Overview
CVG is a global provider of systems, assemblies and components to the global commercial vehicle market and the electric vehicle market. We deliver real solutions to complex design, engineering and manufacturing problems while creating positive change for our customers, industries, and communities we serve.
We have manufacturing operations in the United States, Mexico, China, United Kingdom, Czech Republic, Ukraine, Morocco, Thailand, India and Australia. Our products are primarily sold in North America, Europe, and the Asia-Pacific region.
We primarily manufacture customized products to meet the requirements of our customers. We believe our products are used by a majority of the North American Commercial Truck markets and many construction and agriculture vehicle OEMs, parts and service dealers, and distributors.
Key Developments
On March 27, 2026, the Company entered into a Purchase and Sale Agreement (the “Purchase Agreement”), pursuant to which the parties agreed to consummate a sale and leaseback transaction (the “Sale and Leaseback Transaction”). Under the terms of the Purchase Agreement, CVG agreed to sell that certain property located in Vonore, Tennessee (the “Vonore Property”) for a purchase price of $16 million. The Company completed the sale of the Vonore Property on March 27, 2026, and entered into a long-term lease, pursuant to which the Company will lease the Vonore Property at an initial annual base rent of approximately $1.4 million for the first year and annual increases of 3.5% thereafter. The lease will be for a twenty-year term. The closing of the sale of the Vonore Property provided the Company with net proceeds (after tax and transaction-related costs) of approximately $14.6 million. The Company used the net proceeds from the Sale and Leaseback Transaction to prepay a portion of its existing term loan facility, thereby reducing the Company’s leverage profile.
We are navigating through several challenging external factors which create uncertainty and volatility in our end markets, including, but not limited to, geopolitical dynamics, new and changing tariff actions and responses, tax regulation and fluctuating foreign exchange rates. We expect the Company’s cost of goods sold will continue to be impacted by tariffs which increase the price of materials purchased and products sold to customers. In the past, we have negotiated with our customers in an attempt to pass on a portion of the increased costs resulting from the tariffs to our customers, although there is significant uncertainty as to our ability to pass these costs, or a portion of these costs, along to our customers. Geopolitical uncertainties may continue to create a challenging operating environment. We continue to closely monitor the situation and are prepared to remain agile in responding to any new developments. In addition, lower courts and administrative processes will need to provide guidance with respect to refund-related questions with respect to the IEEPA tariffs paid prior to the recent U.S. Supreme Court decision.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”), which includes a broad range of tax reform provisions, was signed into law in the United States. Key provisions of the bill include, but are not limited to, immediate expensing of R&D expenditures, restoration and expansion of 100% bonus depreciation and permanent reinstatement of the EBITDA limitation for the calculation of the Section 163(j) business interest expense deduction. Additionally, the bill extends and modifies certain international tax provisions of the 2017 Tax Cuts and Jobs Act that were set to expire at the end of 2025. The tax provisions in OBBBA did not have a material impact on the Company’s consolidated financial statements or results of operations.
23
Consolidated Results of Operations
Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025
The table below sets forth certain consolidated operating data for the three months ended March 31 (dollars are in thousands):
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||
| Revenues | $ | 171,495 | $ | 169,795 | $ | 1,700 | 1.0% | ||||||||||||||||
| Gross profit | 19,815 | 17,793 | 2,022 | 11.4 | |||||||||||||||||||
| Selling, general and administrative expenses | 19,059 | 16,385 | 2,674 | 16.3 | |||||||||||||||||||
| Gain on sale of assets | (13,957) | — | (13,957) | NM1 | |||||||||||||||||||
| Other (income) expense | 886 | (72) | 958 | NM1 | |||||||||||||||||||
| Warrant expense | 4,978 | — | 4,978 | NM1 | |||||||||||||||||||
| Loss on extinguishment of debt | 1,958 | — | 1,958 | NM1 | |||||||||||||||||||
| Interest expense | 4,095 | 2,503 | 1,592 | 63.6 | |||||||||||||||||||
| Provision for income taxes | 1,894 | 2,116 | (222) | (10.5) | |||||||||||||||||||
Net income (loss) from continuing operations | 902 | (3,139) | 4,041 | (128.7) | |||||||||||||||||||
1.Not meaningful
Revenues. The increase in consolidated revenues resulted from:
•a $2.1 million, or 1.5%, increase in OEM and other sales;
•a $0.4 million, or 1.1%, decrease in aftermarket and OES sales.
The increase in revenues of 1.0% is primarily driven by 14% growth in our Global Electrical Systems segment, offset by softer customer demand in the Global Seats and Trim Systems & Components segments particularly in the North America heavy truck market.
Gross Profit. Included in gross profit is cost of revenues, which consists primarily of raw materials and purchased components for our products, wages and benefits for our employees and overhead expenses such as manufacturing supplies, facility rent and utilities costs related to our operations. The $2.0 million increase in gross profit is primarily attributable to the impact of increased sales volumes and operational efficiency improvements. Cost of revenues decreased $0.3 million, or 0.2%, as a result of a decrease in raw material and purchased component costs of $0.7 million, or 0.8%, and a increase in labor and overhead expenses of $0.4 million, or 0.7%. As a percentage of revenues, gross profit margin was 11.6% for the three months ended March 31, 2026 compared to 10.5% for the three months ended March 31, 2025. The three months ended March 31, 2026 results include charges of $1.2 million associated with restructuring programs, compared to $0.5 million for the three months ended March 31, 2025.
Selling, General and Administrative Expenses. Selling, general and administrative ("SG&A") expenses consist primarily of wages and benefits and other expenses such as marketing, travel, legal, audit, rent and utilities costs, which are not directly or indirectly associated with the manufacturing of our products. SG&A expenses increased $2.7 million compared to the three months ended March 31, 2025, primarily as a result of increased incentive compensation expense. As a percentage of revenues, SG&A expense was 11.1% and 9.6% for the three months ended March 31, 2026 and 2025, respectively.
Gain on sale of assets. During the three months ended March 31, 2026, the Company recognized a gain of $13.7 million related to the Sale and Leaseback Transaction.
Other (Income) Expense. Other expense increased $1.0 million in the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily related to unfavorable change in foreign currency.
Warrant expense. Change in fair value of warrant liabilities represents the mark-to-market fair value adjustments to the outstanding warrants issued in connection with entering into the Term Loan due 2030. The change in fair value of the outstanding warrants liability during three months ended March 31, 2026 was 5.0 million. The change in fair value of stock warrants was the result of changes in market prices and other observable inputs deriving the value of the financial instruments.
Loss on extinguishment of debt. The loss recognized from the extinguishment of debt includes a non-cash expense of $0.9 million for the write-off of deferred financing costs, as well as a prepayment premium and make-whole interest totaling $1.0 million, both of which are associated with the repayment of the Term Loan following the Sale and Leaseback transaction.
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Interest Expense. Interest associated with our debt increased $1.6 million in the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase in interest expense was primarily attributed to higher interest rates from our refinancing completed during the second quarter of 2025.
Provision for Income Taxes. Income tax expense of $1.9 million and $2.1 million were recorded for the three months ended March 31, 2026 and 2025, respectively. The primary driver in the tax expense was the Company's mix of profitable foreign operations and losses in the US while maintaining its full valuation allowance position on U.S. deferred tax assets.
Net Income (Loss) from continuing operations. Net income from continuing operations was $0.9 million for the three months ended March 31, 2026 compared to net loss of $3.1 million for the three months ended March 31, 2025. The increase in net income is attributable to the factors noted above.
Segment Results
Global Seating Segment Results
Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025
The table below sets forth certain Global Seating Segment operating data for the three months ended March 31 (dollars are in thousands):
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||
| Revenues | $ | 74,505 | $ | 73,408 | $ | 1,097 | 1.5% | ||||||||||||||||
| Gross profit | 10,432 | 9,091 | 1,341 | 14.8 | |||||||||||||||||||
| Selling, general & administrative expenses | 7,366 | 6,378 | 988 | 15.5 | |||||||||||||||||||
| Gain on sale of assets | (13,716) | — | (13,716) | NM1 | |||||||||||||||||||
| Operating income | 16,782 | 2,713 | 14,069 | 518.6 | |||||||||||||||||||
1.Not meaningful
Revenues. The increase in Global Seating Segment revenues of $1.1 million primarily resulted from higher international volumes, offset by decreased customer demand in North America.
Gross Profit. The increase in 2026 gross profit of $1.3 million was primarily due to the impact of increased sales volumes and operational efficiency improvements. The decrease in cost of revenues was driven by a decrease in raw material and purchased component costs of $0.9 million, or 2.4%, and a increase in labor and overhead expenses of $0.7 million, or 2.8%.
As a percentage of revenues, gross profit margin was 14.0% for the three months ended March 31, 2026 compared to 12.4% for the three months ended March 31, 2025. The three months ended March 31, 2026 results include charges of $0.5 million associated with restructuring programs, compared to zero for the three months ended March 31, 2025.
Selling, General and Administrative Expenses. SG&A expenses increased $1.0 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily as a result of increased incentive compensation expense.
Gain on sale of assets. During the three months ended March 31, 2025, the Company recognized a gain of $13.7 million related to the Sale and Leaseback Transaction.
25
Global Electrical Systems Segment Results
Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025
The table below sets forth certain Global Electrical Systems Segment operating data for the three months ended March 31 (dollars are in thousands):
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||
| Revenues | $ | 57,446 | $ | 50,453 | $ | 6,993 | 13.9% | ||||||||||||||||
| Gross profit | 5,769 | 3,990 | 1,779 | 44.6 | |||||||||||||||||||
| Selling, general & administrative expenses | 5,784 | 4,306 | 1,478 | 34.3 | |||||||||||||||||||
| Operating income | (15) | (316) | 301 | (95.3) | |||||||||||||||||||
Revenues. The increase in Global Electrical Systems Segment revenues of $7.0 million was primarily as a result of new business wins.
Gross Profit. The increase in gross profit of $1.8 million was primarily attributable to volume and mix. The increase in cost of revenues was driven by an increase in raw material and purchased component costs of $4.1 million, or 17.1%, and an increase in labor and overhead expenses of $1.1 million, or 4.9%.
As a percentage of revenues, gross profit margin was 10.0% for the three months ended March 31, 2026 compared to 7.9% for the three months ended March 31, 2025. The increase in gross profit margin was primarily due to mix and improved operational efficiency. The three months ended March 31, 2026 results include charges of $0.5 million associated with restructuring programs, compared to $0.5 million for the three months ended March 31, 2025.
Selling, General and Administrative Expenses. SG&A expenses increased $1.5 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily as a result of increased incentive compensation expense.
Trim Systems and Components Segment Results
Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025
The table below sets forth certain Trim Systems and Components Segment operating data for the three months ended March 31 (dollars are in thousands):
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||
| Revenues | $ | 39,544 | $ | 45,934 | $ | (6,390) | (13.9)% | ||||||||||||||||
| Gross profit | 3,614 | 4,712 | (1,098) | (23.3) | |||||||||||||||||||
| Selling, general & administrative expenses | 3,714 | 3,177 | 537 | 16.9 | |||||||||||||||||||
| Operating income (loss) | (100) | 1,535 | (1,635) | NM1 | |||||||||||||||||||
1.Not meaningful
Revenues. The decrease in the Trim Systems and Components Segment revenues of $6.4 million was primarily driven by lower sales volume as a result of softening customer demand in North America.
Gross Profit. The decrease in gross profit of $1.1 million was primarily attributable to lower sales volume. The cost of revenues decreased in line with the sales decrease of 13.9%, driven by a decrease in labor and overhead expenses of $1.4 million, or 9.3%; and a decrease in raw material and purchased component costs of $3.9 million, or 14.8%.
As a percentage of revenues, gross profit margin was 9.1% for the three months ended March 31, 2026 compared to 10.3% for the three months ended March 31, 2025. The decrease in gross profit margin was primarily due to lower sales volume. The three months ended March 31, 2026 results include charges of $0.2 million associated with restructuring programs, compared to zero for the three months ended March 31, 2025.
Selling, General and Administrative Expenses. SG&A expenses increased $0.5 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.
26
Liquidity and Capital Resources
Our primary sources of liquidity as of March 31, 2026 were operating income, cash and availability under our credit facility. We believe that these sources of liquidity will provide adequate funds for our working capital needs, capital expenditures and debt service throughout the next twelve months. However, no assurance can be given that this will be the case. We also rely on the timely collection of receivables as a source of liquidity. As of March 31, 2026, we had outstanding letters of credit of $3.5 million and borrowing availability of $99.7 million from our U.S. and China credit facilities (subject to customary borrowing base and other conditions), in addition to $28.7 million of cash.
As of March 31, 2026, cash of $28.7 million was held by foreign subsidiaries. The Company had a $0.2 million deferred tax liability as of March 31, 2026 for the expected future income tax implications of repatriating cash from the foreign subsidiaries for which indefinite reinvestment is not expected.
We intend to allocate resources consistent with the following priorities: (1) invest in growth; (2) invest in operational improvements; (3) manage working capital; (4) reduce debt; and (5) other actions deemed appropriate by management to improve operational performance.
Covenants and Liquidity
Our ability to comply with the covenants in the Term Loan and ABL Revolving Credit Facility, as discussed in Note 4, Debt, may be affected by economic or business conditions beyond our control. Based on our current forecast, we believe that we will be able to maintain compliance with the financial maintenance covenants and the fixed charge coverage ratio covenant and other covenants in the Term Loan and ABL Revolving Credit Facility for the next twelve months; however, no assurances can be given that we will be able to comply. We base our forecasts on historical experience, industry forecasts and other assumptions that we believe are reasonable under the circumstances. If actual results are substantially different than our current forecast, we may not be able to comply with our financial covenants.
Sources and Uses of Cash
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| (In thousands) | |||||||||||
Cash provided by (used in): | |||||||||||
Net cash provided by (used in) operating activities | $ | (1,561) | $ | 15,172 | |||||||
Net cash provided by (used in) investing activities | 13,239 | (3,806) | |||||||||
Net cash used in financing activities | (15,726) | (18,120) | |||||||||
Effect of currency exchange rate changes on cash | (550) | 337 | |||||||||
Net increase (decrease) in cash | $ | (4,598) | $ | (6,417) | |||||||
Operating activities. For the three months ended March 31, 2026, net cash used in operating activities was $1.6 million compared to net cash provided by operating activities of $15.2 million for the three months ended March 31, 2025. Net cash used in operating activities is primarily attributable an increase in trade working capital for the three months ended March 31, 2026 as compared to a decrease in trade working capital for the three months ended March 31, 2025.
Investing activities. For the three months ended March 31, 2026, net cash provided by investing activities was $13.2 million compared to cash used in investing activities of $3.8 million for the three months ended March 31, 2025. The change was mainly due to $15.9 million in proceeds from the sale of assets in the current year. In 2026, we expect capital expenditures to be in the range of $13 million to $17 million.
Financing activities. For the three months ended March 31, 2026, net cash used in financing activities was $15.7 million compared to net cash used in financing activities of $18.1 million for the three months ended March 31, 2025. Use of cash in financing activities during the three months ended March 31, 2026 was primarily attributable to the pay down of our debt which totaled $14.9 million, of which $14.6 million was a mandatory paydown from the Sale and Leaseback Transaction.
Debt and Credit Facilities
The debt and credit facilities descriptions in Note 4, Debt are incorporated in this section by reference.
27
Critical Accounting Policies and Estimates
Our consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). For a comprehensive discussion of our significant accounting policies, see "Note 1. Significant Accounting Policies", to our consolidated financial statements in Item 8 in our 2025 Form 10-K.
Critical accounting estimates are those that are most important to the portrayal of our financial condition and results. These estimates require management's most difficult, subjective, or complex judgments, often as a result of the need to estimate matters that are inherently uncertain. We review the development, selection, and disclosure of our critical accounting estimates with the Audit Committee of our board of directors. For information about critical accounting estimates, see Critical Accounting Estimates in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2025 Form 10-K. At March 31, 2026, there have been no material changes to our critical accounting estimates from those disclosed in our 2025 Form 10-K.
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. For this purpose, any statements contained herein that are not statements of historical fact, including without limitation, certain statements under “Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations” and located elsewhere herein regarding industry outlook, the Company’s plans to improve financial results, the future of the Company’s end markets, including, but not limited to, global commercial vehicle markets and electric vehicle markets, changes in the North America Class 8 and Class 5-7 truck build rates, performance of the global construction and agricultural equipment businesses, the Company’s prospects in the global commercial vehicle markets and electric vehicle markets, the Company’s initiatives to address customer needs, organic growth, the Company’s strategic plans and plans to focus on certain segments, competition faced by the Company, volatility in and disruption to the global economic environment, including global supply chain constraints, inflation and labor shortages, tariffs and counter-measures, financial covenant compliance, anticipated effects of acquisitions or divestitures, production of new products, plans for capital expenditures and our results of operations or financial position and liquidity, may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believe”, “anticipate”, “plan”, “expect”, “intend”, “will”, “should”, “could”, “would”, “project”, “continue”, “likely”, and similar expressions, as they relate to us, are intended to identify forward-looking statements. The important factors discussed in “Item 1A - Risk Factors”, among others, could cause actual results to differ materially from those indicated by forward-looking statements made herein and presented elsewhere by management from time to time. Such forward-looking statements represent management’s current expectations and are inherently uncertain. Investors are warned that actual results may differ from management’s expectations. Additionally, various economic and competitive factors could cause actual results to differ materially from those discussed in such forward-looking statements, including, but not limited to, factors which are outside our control.
Any forward-looking statement that we make in this report speaks only as of the date of such statement, and we undertake no obligation to update any forward-looking statement or to publicly announce the results of any revision to any of those statements to reflect future events or developments. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless specifically expressed as such, and should only be viewed as historical data.
ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
For information relating to quantitative and qualitative disclosures about market risk, see the discussion under "Item 7A. Quantitative and Qualitative Disclosures About Market Risk" in our 2025 Form 10-K. As of March 31, 2026, there have been no material changes in our exposure to market risk from those disclosed in our 2025 Form 10-K.
ITEM 4 – CONTROLS AND PROCEDURES
Disclosure Controls and Procedures. Our senior management is responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms.
28
We evaluated, the effectiveness of our disclosure controls and procedures as of March 31, 2026. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective as of March 31, 2026 to provide reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and that such information is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting. There were no changes during the quarter ended March 31, 2026 in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls. Our management, including our President and Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of error or mistake. Controls also can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.
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PART II. OTHER INFORMATION
ITEM 1 Legal Proceedings
We are subject to various legal proceedings and claims arising in the ordinary course of business, including, but not limited to, product liability claims, customer and supplier disputes, service provider disputes, examinations by taxing authorities, employment disputes, workers’ compensation claims, unfair labor practice charges, OSHA investigations, intellectual property disputes and environmental claims arising out of the conduct of our businesses. Based upon the information available to management and discussions with legal counsel, it is the opinion of management that the ultimate outcome of the various legal actions and claims that are incidental to our business are not expected to have a material adverse impact on the consolidated financial position, results of operations, stockholders' equity or cash flows; however, such matters are subject to many uncertainties and the outcomes of individual matters are not predictable with any degree of assurance.
ITEM 1A Risk Factors
You should carefully consider the information in this Form 10-Q, the risk factors discussed in "Risk Factors" and other risks discussed in our 2025 Form 10-K and our filings with the SEC since December 31, 2025. These risks could materially and adversely affect our results of operations, financial condition, liquidity and cash flows. Our business also could be affected by risks that we are not presently aware of or that we currently consider immaterial to our operations.
ITEM 2 Unregistered Sales of Equity Securities and Use of Proceeds
None.
ITEM 3 Defaults Upon Senior Securities
Not applicable.
ITEM 4 Mine Safety Disclosures
Not applicable.
ITEM 5 Other Information
Neither the Company nor any of our officers or directors adopted terminated
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ITEM 6 Exhibits
| Support Agreement by and among the Company and Lakeview, dated February 5, 2026 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 6, 2026). | |||||
| Purchase Agreement dated March 27, 2026 between CVG National Seating Company, LLC, a subsidiary of Commercial Vehicle Group, Inc. and Big Acquisitions LLC, an affiliate of 200 National LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 2, 2026). | |||||
| Lease Agreement by and between 200 National LLC and Commercial Vehicle Group, Inc. dated as of March 27, 2026 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on April 2, 2026). | |||||
| 302 Certification by James R. Ray, President and Chief Executive Officer. | |||||
302 Certification by Angela O'Leary, Interim Chief Financial Officer. | |||||
| Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||
| Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||
| 101 | Interactive Data Files | ||||
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| COMMERCIAL VEHICLE GROUP, INC. | ||||||||||||||
| Date: | May 5, 2026 | By | /s/ Angela M. O'Leary | |||||||||||
| Angela M. O'Leary | ||||||||||||||
Interim Chief Financial Officer, Chief Accounting Officer | ||||||||||||||
(Principal Financial and Principal Accounting Officer) | ||||||||||||||
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Exhibit 10.1
SUPPORT AGREEMENTThis Support Agreement, dated February 5, 2026 (this “Agreement”), is by and among the persons and entities listed on Schedule A hereto (collectively, “Lakeview” or the “Lakeview Parties”) and Commercial Vehicle Group, Inc. (the “Company”). The Company and Lakeview are collectively referred to herein as the “Parties” and each of the Company and Lakeview, a “Party.”
RECITALS
WHEREAS, the Company and Lakeview have engaged in various discussions and communications concerning the Company’s business, financial performance and other matters;
WHEREAS, Lakeview is deemed to Beneficially Own shares of common stock of the Company, par value $0.01 per share (the “Common Stock”), totaling, in the aggregate, 3,265,752 shares, or approximately 8.9%, of the Common Stock issued and outstanding on the date hereof; and
WHEREAS, the Company has determined that it is in the best interests of the Company and its stockholders and Lakeview has determined that it is in its best interests to come to an agreement with respect to certain matters in respect of the Board of Directors of the Company (the “Board”) and certain other matters, as provided in this Agreement, including, among other things, with respect to the appointment to the Board of a new director proposed by Lakeview and approved by the Board (the “New Director” and any New Director who is also a Lakeview Representative (as defined below) shall be a “Lakeview Director”).
NOW, THEREFORE, in consideration of and reliance upon the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto agree as follows:
1. Board Representation and Board Matters.
(a) Concurrently with the execution of this Agreement the Company has (i) increased the size of the Board by one director to seven directors such that there would be a vacancy on the Board and (ii) appointed Ari B. Levy (the “Lakeview Director” or the “New Director”) to fill the newly created vacancy.
(b) As a condition to the New Director’s appointment to the Board, the New Director has, prior to the date hereof, provided to the Company a completed D&O Questionnaire in the form separately provided to Lakeview (the “D&O Questionnaire”), an executed letter in the form attached hereto as Exhibit A (the “Nominee Letter” and together with the D&O Questionnaire, the “Nomination Documents”) and the New Director has, prior to the date hereof met with representatives of the Nominating, Governance and Sustainability Committee of the Board in accordance with the practices of the Board and the Nominating, Governance and Sustainability Committee and consented to the Company’s standard background check for new director candidates. In addition, as a condition to the Lakeview Director’s appointment to the Board, the Lakeview Director has, prior to the date hereof, provided to the Company an executed irrevocable resignation in the form attached hereto as Exhibit B (the “Resignation Letter”).
(c) Should the New Director be unable or unwilling to serve on the Board at any time prior to the Termination Date (as defined below) due to death, disability or incapacity, resignation or
removal or for any other reason, and at such time, Lakeview satisfies the Minimum Ownership Threshold (as defined below), the Company will appoint a replacement, to be proposed by Lakeview, and agreed to by the Company (a “Replacement”), which approval shall occur as soon as reasonably practicable following Lakeview’s proposal of a candidate and shall not be unreasonably withheld, conditioned or delayed, and such Replacement shall be appointed to the Board as promptly as practicable after the Board has approved of such candidate. In the event the Board determines in good faith not to approve any Replacement proposed by Lakeview and Lakeview continues to satisfy the Minimum Ownership Threshold, Lakeview shall have the right to propose additional Replacements in accordance with this Section 1(c) until a Replacement is appointed to the Board. Any such Replacement who becomes a Board member in replacement of the New Director shall be deemed to be the New Director and, if such Replacement is a partner, officer or employee of Lakeview (a “Lakeview Representative”), shall also be deemed a Lakeview Director, in each case, for all purposes under this Agreement, and prior to his or her appointment to the Board, shall be required to provide to the Company equivalent Nomination Documents, including the Resignation Letter if such Replacement is a Lakeview Representative, meet with representatives of the Nominating, Governance and Sustainability Committee of the Board in accordance with the practices of the Board and the Nominating, Governance and Sustainability Committee and consent to the Company’s standard background check for new director candidates. Subject to the Nasdaq Global Select Market,(“Nasdaq”) rules and applicable law, upon a Replacement’s appointment to the Board as the New Director, the Board and all applicable committees of the Board shall take all necessary actions to appoint such Replacement to any applicable committee of the Board of which the New Director was a member immediately prior to such New Director’s departure from the Board. Until the Termination Date, any Replacement designated pursuant to this Section 1(c) replacing a New Director prior to the mailing of the Company’s definitive proxy statement for the Company’s 2026 Annual Meeting of Stockholders (including, but not limited to, any adjournments or postponements thereof and any meeting which may be called in lieu thereof, the “2026 Annual Meeting”) shall stand for election at such 2026 Annual Meeting together with the Company’s other director nominees in accordance with Section 1(d); provided, however, that in no event shall the Company be obligated to nominate any Replacement for election at such 2026 Annual Meeting unless such Replacement was appointed as the New Director prior to mailing the Company’s definitive proxy statement for the 2026 Annual Meeting.
(d) The Company agrees that the Board shall take all necessary actions to nominate the New Director for election to the Board at the 2026 Annual Meeting and recommend, support and solicit proxies for the election of the New Director at the 2026 Annual Meeting in a manner no less rigorous and favorable than the manner in which the Company supports and solicits proxies for the election of its other nominees at the 2026 Annual Meeting.
(e) At all times while serving as a member of the Board, the New Director shall (i) comply with all policies, procedures, processes, codes, rules, standards and guidelines applicable to non-employee Board members, including the Company’s Code of Conduct, ethical conduct guidelines, securities trading policies, anti-hedging policies, Regulation FD-related policies, director confidentiality policies and corporate governance guidelines, and subject to Section 9 of this Agreement with respect to the Lakeview Director, preserve the confidentiality of Company business and information, including discussions or matters considered in meetings of the Board or Board committees and (ii) have the same rights and benefits, including with respect to insurance, indemnification, compensation and fees, as are applicable to all non-employee directors of the Company.
(f) If at any time after the date hereof when the Lakeview Director is serving on the Board, (i) Lakeview ceases to Beneficially Own, an aggregate Net Long Position equal to at least the lesser of 4.5% of the Company’s then-outstanding shares of Common Stock and 1,652,912
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shares of Common Stock (subject to adjustment for stock splits, reclassifications, combinations and similar adjustments) (such lesser amount, the “Minimum Ownership Threshold”), or (ii) Lakeview or any Lakeview Affiliate breaches in any material respect any of the terms of this Agreement and (A) the Company specifies in written notice, in reasonable detail, the material breach on which it is relying to terminate its obligations, (B) such breach (if capable of being cured) has not been cured within fifteen (15) days’ of Lakeview’s receipt of such written notice from the Company or, if impossible to cure within fifteen (15) days, which Lakeview has not taken any substantive action to cure within such 15-day period, and (C) neither the Company nor any of its Affiliates are in material breach of this Agreement at the time such notice is given or prior to the end of the notice period, the Resignation Letter shall become effective upon acceptance by the Board (it being understood that it shall be in the Board’s sole discretion whether to accept or reject such resignation and that the Lakeview Director shall recuse himself or herself from the decision whether to accept or reject such resignation), and the Company shall have no further obligations under Section 1 of this Agreement. In the event that Lakeview or any of its Affiliates submits any director nomination for election at any meeting of the Company’s stockholders while the Lakeview Director is serving on the Board, the Lakeview Director shall promptly offer to resign from the Board (and, if requested by the Company, promptly deliver his or her written resignation to the Board for his or her immediate resignation, it being understood that it shall be in the Board’s sole discretion whether to accept or reject such resignation). Lakeview shall cause the Lakeview Director to comply with the terms of the Resignation Letter and the terms of this Section 1(f). During such time as the Lakeview Director is serving on the Board, Lakeview shall notify the Company in writing promptly, but in no event later than five (5) business days, after becoming aware of Lakeview’s aggregate Beneficial Ownership failing to equal or exceed the Minimum Ownership Threshold.
(g) Promptly following the appointment of the New Director to the Board, the Board and all applicable committees of the Board shall take such actions as are necessary to appoint the New Director to each of the Audit Committee and the Nominating, Governance and Sustainability Committee of the Board. The New Director shall continue to serve on such committees until the Termination Date, subject to such New Director’s willingness to continue to serve on such committees. Subject to Nasdaq rules and applicable law, the Board and all applicable committees of the Board shall take all actions to ensure that until the Termination Date, any special committee of the Board established on or following the date hereof includes the New Director, other than a special committee of disinterested directors, as defined under §144(d)(2) of the Delaware General Corporation Law if the Board determines, based on the advice of counsel, that the New Director is not a disinterested director. Without limiting the foregoing, the Company agrees that the New Director shall be given the same due consideration for membership to each committee of the Board as any other independent director with similar relevant expertise and qualification, including any new committee(s) and subcommittee(s) that may be established.
(h) Lakeview agrees that the Board or any committee or subcommittee thereof, in the exercise of its fiduciary duties, may recuse the Lakeview Director from any Board or committee or subcommittee meeting or portion thereof (provided that the Lakeview Director shall be given notice of any Board or committee meeting from which he or she is recused) at which the Board or any such committee or subcommittee is evaluating and/or taking action with respect to (i) the exercise of any of the Company’s rights or enforcement of any of the obligations under this Agreement, (ii) any action taken in response to actions taken or proposed by Lakeview or its Affiliates with respect to the Company that the Board believes in good faith
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represents a potential conflict, or (iii) any proposed transaction between the Company and Lakeview or its Affiliates.
(i) During the period commencing with the date of this Agreement through the Termination Date (the “Standstill Period”), the Board and all applicable committees of the Board shall not increase the size of the Board to more than seven (7) directors.
2. Certain Other Matters.
(a) Lakeview agrees that, during the Standstill Period, no member of Lakeview shall, directly or indirectly, and each member of Lakeview shall cause each Lakeview Affiliate not to, directly or indirectly:
(i) solicit proxies or written consents of stockholders or conduct any other type of referendum (binding or non-binding) with respect to, or from the holders of, the Voting Securities (as defined herein), or become a “participant” (as such term is defined in Instruction 3 to Item 4 of Schedule 14A promulgated under the Exchange Act) in or knowingly assist any Third Party (as defined herein) in any “solicitation” of any proxy, consent or other authority (as such terms are defined under the Exchange Act) to vote any shares of the Voting Securities (in each case, other than such encouragement, advice, assistance or influence that is consistent with the Board’s recommendation in connection with such matter);
(ii) knowingly encourage, knowingly advise or knowingly influence any other person or knowingly assist any Third Party in so encouraging, assisting or influencing any other person with respect to the giving or withholding of any proxy, consent or other authority to vote, any Voting Securities, or in conducting any type of referendum with respect to the Company (in each case, other than such encouragement, advice, influence, or assistance that is consistent with the Board’s recommendation in connection with such matter); provided, that, the foregoing shall not limit the giving by Lakeview or its Affiliates or Associates of a proxy, consent or other authority to vote in respect of any matter so long as the voting of the Voting Securities owned thereby are voted in accordance with the terms of this Agreement;
(iii) form or join in a partnership, limited partnership, syndicate or group, as defined under Section 13(d) of the Exchange Act, with respect to the Voting Securities (other than a group the members of which consist only of all or some of the members of Lakeview; provided that nothing herein shall limit the ability of an Affiliate of Lakeview to join or in any way participate in such group following the execution of this Agreement, so long as any such Affiliate agrees to be bound by the terms and conditions of this Agreement);
(iv) present at any annual meeting or any special meeting of the Company’s stockholders or through action by written consent any proposal for consideration for action by stockholders or seek the removal of any member of the Board or propose any nominee for election to the Board or seek representation on the Board, except as specifically permitted in Section 1;
(v) other than in open market sale transactions where the identity of the purchaser is not known or in underwritten widely-dispersed public offerings, sell, offer or agree to sell directly or indirectly, through swap, hedging, derivative transactions or otherwise, the securities of the Company or any rights decoupled from the underlying securities held by Lakeview to any person or entity not (A) a Party to this Agreement or (B) an Affiliate or Associate of Lakeview (any such person or entity not set forth in clauses (A) and (B), a “Third Party”) that would knowingly result in such Third Party, together with its
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Affiliates, owning, controlling or otherwise having any Beneficial Ownership or other ownership interest in the aggregate of 5% or more of the shares of Common Stock outstanding at such time or would increase the Beneficial Ownership or other ownership interest of any Third Party who, together with its Affiliates, has a beneficial or other ownership interest in the aggregate of 5% or more of the shares of Common Stock outstanding at such time, except in each case in a transaction approved by the Board or to Schedule 13G filers that are mutual funds, pension funds, index funds or investment fund managers with no known history of activism or known plans to engage in activism;
(vi) grant any proxy, consent or other authority to vote any Voting Securities with respect to any matters or deposit any Voting Securities in a voting trust or subject them to a voting agreement or other arrangement of similar effect with respect to any annual meeting or special meeting of the Company’s stockholders or action by written consent (excluding customary brokerage accounts, margin accounts, prime brokerage accounts and similar accounts), other than (A) any voting trust, voting agreement or similar arrangement solely among Lakeview and its Affiliates that is otherwise in accordance with this Agreement, or (B) granting any proxy, consent or other authority to vote any Voting Securities (1) approved by the Board and consistent with the recommendation of the Board or (2) in connection with any matter for which Lakeview or any Lakeview Affiliate retains voting discretion pursuant to, and in accordance with, Section 2(c);
(vii) without the prior approval of the Board, separately or in conjunction with any Third Party in which it is or proposes to be either a principal, partner or financing source or is acting or proposes to act as broker or agent for compensation, publicly propose, effect or seek to effect, any Extraordinary Transaction (as defined herein), if any, or knowingly encourage, initiate, or knowingly support any other Third Party in any such activity;
(viii) acquire, or offer, seek or agree to acquire, by purchase or otherwise, or direct any Third Party to assist Lakeview or its Affiliates in the acquisition of Beneficial Ownership of any securities of the Company, or rights or options to acquire any securities of the Company, or engage in any swap or hedging transactions or other derivative agreements of any nature with respect to securities of the Company, in each case if such acquisition, offer, agreement or transaction would result in Lakeview (together with its Affiliates) having Beneficial Ownership of, or aggregate economic exposure to, more than 14.99% of the Common Stock outstanding at such time; provided, that, the prohibitions under this Section 2(a) shall not apply to any (A) director awards or grants made to the Lakeview Director in connection with his or her service as a director, or (B) stock dividends or other distributions or offerings made available to holders of the Company’s capital stock generally on a pro rata basis or pursuant to any Extraordinary Transaction;
(ix) make any public proposal, alone or with a Third Party, with respect to (A) any change in the number of directors or to fill any vacancies on the Board (other than as provided under Section 1 of this Agreement), (B) any material change in the capitalization, share repurchase programs and practices, capital allocation programs and practices or dividend policy of the Company, (C) any other material change in the Company’s management, business, strategy, or corporate structure, (D) any waiver, amendment or modification to the Company’s certificate of incorporation or Bylaws (as defined herein), (E) causing the Common Stock to be delisted from, or to cease to be authorized to be quoted on, any securities exchange, or (F) causing the Common Stock to become eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act;
(x) engage in any short sale or any purchase, sale or grant of any option, warrant, convertible security, stock appreciation right, or other similar right (including any put or call option or “swap” transaction with respect to any security (other than a broad based market
5
basket or index)) that includes, relates to or derives any significant part of its value from a decline in the market price or value of the securities of the Company;
(xi) enter into any negotiations, arrangements, or understandings with, or finance or knowingly advise, knowingly assist or knowingly encourage, any Third Party to undertake any action that is prohibited under this Section 2(a);
(xii) request, directly or indirectly, any amendment or waiver of the foregoing in a manner that would reasonably likely require public disclosure by Lakeview or the Company; or
(xiii) take any action that could reasonably be expected to cause or require the Company or Lakeview to make a public disclosure with respect to any of the foregoing restrictions.
(b) Notwithstanding anything in this Agreement to the contrary, nothing in this Agreement shall be deemed to restrict Lakeview or its Affiliates or Associates from: (i) communicating privately with (A) the Board or any of the Company’s officers or Representatives (as defined herein) (or any other individuals in the Company authorized by such individuals) or (B) any other Lakeview Covered Person (as defined herein) so long as such communications are in accordance with Section 9 of this Agreement with respect to any Confidential Information (as defined herein), in each case, regarding any matter, including proposing, suggesting or recommending privately to the Company any Extraordinary Transaction, so long as such communications are not intended to, and would not reasonably be expected to, require any public disclosure by the Company, Lakeview or any person; (ii) communicating privately with stockholders of the Company and others in a manner that does not otherwise violate this Section 2 or Section 5; (iii) stating publicly how they intend to vote with respect to any Extraordinary Transaction not approved by the New Director, which has been publicly submitted by the Board for the approval of the Company’s stockholders and the reasons therefor; provided, that Lakeview and its Affiliates shall only be permitted to publicly issue one communication regarding such voting intentions; provided, further, that Lakeview shall provide a copy of such communication to the Company for review as promptly as practicable prior to publication and consider in good faith any reasonable comments made by the Company on the communication and Lakeview shall not communicate privately with other stockholders of the Company regarding such voting intentions; (iv) identifying director candidates in connection with the 2027 Annual Meeting (as defined herein), so long as such actions do not create a public disclosure obligation for the Company, Lakeview or any Lakeview Affiliate or Associate, are not publicly disclosed by Lakeview or any Lakeview Affiliate or Associate and are undertaken on a basis reasonably designed to be confidential and in accordance in all material respects with Lakeview’s normal practices in the circumstances; (v) tendering shares, receiving consideration or other payment for shares or otherwise participating in any transaction approved by the Board or voting upon any Extraordinary Transaction on the same basis as the other stockholders of the Company; (vi) exercising statutory appraisal rights, if any, with respect to the Company; or (vii) taking any action necessary to comply with any Legal Requirement (as defined below), provided, that, such Legal Requirement did not result from any violation of this Agreement by Lakeview. Furthermore, nothing in this Agreement shall be deemed to limit the exercise in good faith by the New Director of such person’s fiduciary duties solely in such person’s capacity as a director of the Company.
(c) Until the end of the Standstill Period, Lakeview and the Lakeview Affiliates shall cause all Voting Securities owned by them directly or indirectly, whether owned of record or Beneficially Owned, as of the record date for any annual or special meeting of stockholders of the Company or in connection with any solicitation of stockholder action by written consent (each a “Stockholders Meeting”) within the Standstill Period, in each case that are entitled to vote at any such Stockholders Meeting, to be present for quorum purposes and to be voted, at
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all such Stockholders Meetings or at any adjournments or postponements thereof, (i) for all directors nominated by the Board for election at such Stockholders Meeting, (ii) against any stockholder nominations for directors that are not approved and recommended by the Board for election at any such meeting, (iii) against any proposals or resolutions to remove any member of the Board, (iv) in favor of the appointment of the Company’s auditor for the ensuing year, (v) in accordance with the Board’s recommendation with respect to the Company’s “say-on-pay” proposal (the “Say-on-Pay Proposal”) and, if necessary, any “say-on-pay frequency” proposal in which the Board recommends “say-on-pay” votes occur once every year, and (vi) in accordance with the Board’s recommendation with respect to any proposal providing for either a new Equity Incentive Plan or an amendment to the Company’s current Equity Incentive Plan (collectively, the “EIP Proposal”); provided, however, that in the event Institutional Shareholder Services Inc. (“ISS”) recommends otherwise with respect to the Say-on-Pay Proposal or the EIP Proposal, at any such Stockholders Meeting, Lakeview and its Affiliates shall be permitted to vote in accordance with the ISS recommendation. For the avoidance of doubt, Lakeview and the Lakeview Affiliates shall be permitted to vote in their discretion on any other proposal to be approved by the Company’s stockholders, including with respect to any Extraordinary Transaction, at any Stockholders Meeting during the Standstill Period.
3. Public Announcements. Promptly following the execution of this Agreement, the Company and Lakeview shall announce this Agreement and the material terms hereof by means of a jointly issued, mutually agreeable press release in the form attached hereto as Exhibit C (the “Press Release”). During the Standstill Period, neither the Company nor Lakeview, nor any Lakeview Affiliate, shall make or cause to be made any public announcement or statement that is inconsistent with or contrary to the statements made in the Press Release or the terms of this Agreement, except as required by law or the rules of any stock exchange or with the prior written consent of the other Party. Lakeview acknowledges and agrees that the Company intends to file this Agreement and file or furnish the Press Release with the SEC as exhibits to a Current Report on Form 8-K and to file this Agreement as an exhibit to future filings with the SEC. Lakeview shall be given a reasonable opportunity to review and comment on any portion of the Current Report on Form 8-K or other filing with the SEC made by the Company with respect to the entry into this Agreement, and the Company shall give good faith consideration to any changes proposed by Lakeview on such Form 8-K. The Company acknowledges that Lakeview may file a Schedule 13D/A with the SEC with this Agreement as an exhibit to such Schedule 13D/A. The Company shall be given a reasonable opportunity to review and comment on such Schedule 13D/A filing made by Lakeview with respect to this Agreement, and Lakeview shall give good faith consideration to any changes proposed by the Company.
4. Insider Trading Restrictions. Lakeview acknowledges that they are aware that United States securities laws may restrict any person who has material, nonpublic information about a company from purchasing or selling any securities of such company while in possession of such information.
5. Non-Disparagement. During the Standstill Period, each of the Company and Lakeview shall refrain from making, and shall cause their respective Affiliates and its and their respective principals, directors, members, general partners, officers and employees (but only to the extent such respective employee is acting at the direction of the Company or Lakeview, as applicable) (collectively, “Covered Persons”), not to make or cause to be made any public statement, public announcement or any statement or announcement that can reasonably be expected to become public that constitutes an ad hominem attack on, or that otherwise disparages, defames, slanders or impugns the reputation of, (A) in the case of any such statements or announcements by Lakeview or its Affiliates or their respective Covered Persons: the Company and its Affiliates or any of its or their current or former Covered Persons; and (B) in the case of any such statements or announcements by the Company or its Affiliates or their respective Covered Persons: Lakeview and its Affiliates or any of its or their current or former Covered Persons, in each case including (x) any statement (oral or written), document or report filed with, furnished or otherwise provided to the SEC (as defined below) or any other governmental agency, (y) in any press release or other publicly available format or (z) to or through any journalist or member of the media (including in a television, radio,
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newspaper or magazine interview or Internet or social media communication), Company stockholder, sell-side or buy-side analyst or other person. The foregoing restrictions shall not (A) apply to (i) any compelled testimony or production of information, whether by legal process, subpoena, or as part of a response to a request for information from any governmental or regulatory authority with jurisdiction over the person from whom information is sought, (ii) any disclosure that such person reasonably believes, after consultation with outside counsel, to be legally required by applicable law, rules or regulations, in each case, to the extent so required, (iii) a Party’s response to the other Party’s breach of this Section 5 or to enforce such Party’s rights pursuant to this Agreement, or (iv) any private communications between the Parties so long as such communications are not intended to, and would not reasonably be expected to, require any public disclosure by the Company, Lakeview or any person, or (B) prohibit either Party from reporting what it reasonably believes, after consultation with outside counsel, to be violations of federal law or regulation to any governmental authority pursuant to Section 21F of the Exchange Act or Rule 21F promulgated thereunder.
6. No Litigation. Each Party agrees that, until the expiration of the Standstill Period, it shall not institute, solicit, join or assist in any lawsuit, claim or proceeding before any court or government agency (each, a “Legal Proceeding”) against the other Party, any Affiliate of the other Party or any of their respective current or former directors or officers (solely in connection with their service in such capacities), except for (a) any Legal Proceeding initiated primarily to remedy a breach of or to enforce this Agreement, (b) counterclaims with respect to any proceeding initiated by or on behalf of one Party or its Affiliates against the other Party or its Affiliates, or (c) bringing bona fide commercial disputes that do not relate to the subject matter of this Agreement; provided, however, that the foregoing shall not prevent any Party or any of its Representatives from responding to oral questions, interrogatories, requests for information or documents, subpoenas, civil investigative demands or similar processes (each, a “Legal Requirement”) in connection with any Legal Proceeding if such Legal Proceeding has not been initiated by, on behalf of or at the suggestion of such Party; provided, further, that in the event any Party or any of its Representatives receives such Legal Requirement, such Party shall give prompt written notice of such Legal Requirement to the other Party (except where such notice would be legally prohibited or not practicable). Each Party represents and warrants that neither it nor any assignee has filed any lawsuit against the other Party. Notwithstanding anything to the contrary herein, this Section 6 shall not prohibit Lakeview or its Representatives from exercising any available statutory appraisal rights (if any) with respect to the Company.
7. Representations and Warranties of All Parties. Each of the Parties represents and warrants to the other Party that: (a) such Party has all requisite power and authority to execute and deliver this Agreement and to perform its obligations hereunder; (b) this Agreement has been duly and validly authorized, executed and delivered by it and is a valid and binding obligation of such Party, enforceable against such Party in accordance with its terms (subject to applicable bankruptcy and similar laws relating to creditors’ rights and to general equity principles) and (c) the execution, delivery and performance of this Agreement does not (i) violate or conflict with any law, rule, regulation, order, judgment, or decree applicable to such Party, or (ii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both could constitute a breach, violation or default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration, or cancellation of, any organizational document, agreement, contract, commitment, understanding, or arrangement to which such Party is a party or by which such Party may otherwise be bound. The Company also represents and warrants that there are no special committees of the Board in existence as of the date of this Agreement.
8. Representations and Warranties of Lakeview. Each member of Lakeview represents and warrants that, as of the date of this Agreement, (a) Lakeview, together with all of the Lakeview Affiliates, collectively Beneficially Own, an aggregate of 3,265,752 shares of Common Stock; (b) except for such ownership, no member of Lakeview, individually or in the aggregate with all other members of Lakeview and the Lakeview Affiliates, has any other Beneficial Ownership of, and/or economic exposure to, any Voting Securities, including through any derivative transaction described in the definition of “Beneficial Ownership” below; (c) Lakeview collectively with the Lakeview Affiliates, have a Net Long Position of
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3,265,752 shares of Common Stock; and (d) Lakeview will not directly or indirectly, compensate or agree to compensate any director of the Company for his or her respective service as a director of the Company, including the New Director, with any cash, securities (including any rights or options convertible into or exercisable for or exchangeable into securities or any profit sharing agreement or arrangement), or other form of compensation directly related to the Company or its securities. For the avoidance of doubt, the Company acknowledges that the Lakeview Director receiving compensation, indemnification and/or reimbursement of expenses from Lakeview or any of its Affiliates in connection with his or her service or action as a partner, officer or employee of Lakeview or any of its Affiliates (and not in connection with his or her service or action as a director of the Company) would not violate this Agreement.
9. Confidentiality. Any New Director that is a Lakeview Representative (or any Replacement thereof), if he or she wishes to do so, may provide confidential information of the Company which he or she learns in his or her capacity as a director of the Company, including discussions or matters considered in meetings of the Board or Board committees (collectively, “Company Confidential Information”), to Lakeview and its Representatives (collectively, “Lakeview Confidentiality Representatives”), in each case, solely to the extent such Lakeview Confidentiality Representatives need to know such information in connection with Lakeview’s investment in the Company; provided, however, that Lakeview shall (a) inform such Lakeview Confidentiality Representatives of the confidential nature of any such Company Confidential Information and (b) cause such Lakeview Confidentiality Representatives to (i) refrain from further disclosing such Company Confidential Information (whether to any company in which Lakeview has an investment or otherwise), by any means, and (ii) not use such Company Confidential Information in any way other than in connection with Lakeview’s investment in the Company. Any New Director that is a Lakeview Representative, and Lakeview shall not, without the prior written consent of the Company, otherwise disclose any Company Confidential Information to any other person or entity.
10. Certain Defined Terms. For purposes of this Agreement:
(a) “Affiliate” and “Associate” shall have the meanings set forth in Rule 12b-2 promulgated by the SEC under the Exchange Act; provided, however, that, for purposes of this Agreement (i) no Lakeview Party shall be deemed an “Affiliate” of the Company and the Company shall not be deemed an “Affiliate” of any Lakeview Party, (ii) an “Affiliate” of a person shall not include any entity, solely by reason of the fact that one or more of such person’s employees or principals serves as a member of its board of directors or similar governing body, unless such person otherwise controls such entity, and (iii) the term “Associate” shall refer only to Associates controlled by the Company or the Lakeview Parties, as applicable;
(b) “Beneficial Ownership” and “Beneficially Own” shall have the meanings ascribed to such terms as set forth in Rule 13d-3 promulgated by the SEC under the Exchange Act and the rules and regulations promulgated thereunder;
(c) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended;
(d) “Extraordinary Transaction” means any tender offer, exchange offer, merger, consolidation, acquisition, reorganization, recapitalization, liquidation, dissolution, restructuring, or sale, spin-off or other disposition of all or substantially all of the Company’s assets in one or more a series of transactions, joint venture or other business combination involving the Company or any of its Subsidiaries;
(e) “Net Long Position” shall mean such shares of Common Stock Beneficially Owned, directly or indirectly, that constitute such person’s net long position as defined in Rule 14e-4 under the Exchange Act, provided that “Net Long Position” shall not include in such person’s “long position” any shares as to which such person does not have the right to vote or direct the vote or as to which such person has entered into a derivative or other agreement, arrangement or
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understanding that hedges or transfers, in whole or in part, directly or indirectly, any of the economic consequences of ownership of such shares;
(f) “person” or “persons” shall mean any individual, corporation (including not-for-profit), general or limited partnership, limited liability or unlimited liability company, joint venture, estate, trust, association, organization or other entity of any kind or nature;
(g) “Representative” shall mean a Party’s Affiliates and its and their respective directors, officers, principals, employees, partners, members, managers, consultants, legal or other advisors acting on such Party’s or such Affiliate’s behalf in connection with the subject matter of this Agreement;
(h) “SEC” shall mean the Securities and Exchange Commission;
(i) “Voting Securities” shall mean the Common Stock, and any other securities of the Company entitled to vote in the election of directors, or securities convertible into, or exercisable or exchangeable for, Common Stock or other securities, whether or not subject to the passage of time or other contingencies; provided, that, as it pertains to any obligations of Lakeview or any of its Affiliates hereunder, “Voting Securities” will not include any securities contained in any index fund, exchange traded fund, benchmark fund or basket of securities which may contain or otherwise reflect the performance of, but not primarily consist of, securities of the Company.
11. Miscellaneous. Each Party shall instruct its controlled Affiliates and Associates to comply with the terms of this Agreement and shall be responsible for any breach of this Agreement by any such controlled Affiliate or Associate. A breach of this Agreement by a controlled Affiliate or Associate of a Party, if such controlled Affiliate or Associate is not a party to this Agreement, shall be deemed to occur if such controlled Affiliate or Associate engages in conduct that would constitute a breach of this Agreement if such controlled Affiliate or Associate was a party to the same extent as a Party to this Agreement. The Parties hereto recognize and agree that if for any reason any of the provisions of this Agreement are not performed in accordance with their specific terms or are otherwise breached, immediate and irreparable harm or injury would be caused for which money damages would not be an adequate remedy. Accordingly, each Party agrees that in addition to other remedies the other Party shall be entitled to at law or equity, the other Party shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement exclusively in the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (or, if the Delaware Court of Chancery declines to accept jurisdiction over a particular matter, any federal court within the State of Delaware). In the event that any action shall be brought in equity to enforce the provisions of this Agreement, no Party shall allege, and each Party hereby waives the defense, that there is an adequate remedy at law. This Agreement shall be construed in accordance with, and this Agreement and all disputes hereunder shall be governed by, the laws of the State of Delaware, without regard to any conflicts of law provision which would require the application of the law of any other jurisdiction. By its execution and delivery of this Agreement, each of the Parties hereto hereby irrevocably and unconditionally agrees for itself that any legal action, suit or proceeding with respect to any matter under or arising out of or in connection with this Agreement or for recognition or enforcement of any judgment in any such action, suit or proceeding may be brought, on a non-exclusive basis, in any federal or state court of competent jurisdiction in the aforesaid courts. By execution and delivery of this Agreement, each of the Parties hereto irrevocably accepts and submits itself to the non-exclusive jurisdiction of any such court, generally and unconditionally, with respect to any such action, suit or proceeding and waives any defense of forum non conveniens or based upon venue if such action, suit or proceeding is brought in accordance with this provision.
12. Expenses. The Company shall reimburse Lakeview for its reasonable, documented out-of-pocket fees and expenses (including legal expenses) incurred in connection with Lakeview’s involvement at the Company,
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including, without limitation, the negotiation and execution of this Agreement, provided that such reimbursement shall not exceed $100,000 in the aggregate.
13. Termination. This Agreement shall immediately and automatically terminate upon the earlier of (i) the 30th day prior to the advance notice deadline for making director nominations at the Company’s 2027 annual meeting of stockholders (the “2027 Annual Meeting”) under the Company’s Amended and Restated Bylaws (the “Bylaws”), and (ii) 100 calendar days prior to the first anniversary of the 2026 Annual Meeting (it being understood that the Company shall be required to give sufficient advance written notice to Lakeview in the event the Company determines to advance or delay the 2027 Annual Meeting, so that Lakeview will continue to have no less than thirty (30) calendar days to nominate at such meeting) (such earlier date, the “Termination Date”); provided, that (x) the Lakeview Parties may earlier terminate this Agreement if the Company commits a material breach of its obligations under this Agreement that (if capable of being cured) is not cured within fifteen (15) days after the Company’s receipt of written notice thereof from the Lakeview Parties or, if impossible to cure within fifteen (15) days, which the Company has not taken any substantive action to cure within such 15-day period, and (y) the Company may earlier terminate this Agreement if any of the Lakeview Parties commits a material breach of this Agreement that (if capable of being cured) is not cured within fifteen (15) days after the Lakeview Parties’ receipt of written notice thereof from the Company specifying the material breach or, if impossible to cure within fifteen (15) days, which the Lakeview Parties have not taken any substantive action to cure within such 15-day period. Notwithstanding the foregoing, the provisions of Section 1(f) relating to the resignation of the Lakeview Director and Section 9 through Section 21 shall survive the termination of this Agreement. Termination of this Agreement shall not relieve any Party from its responsibilities in respect of any willful breach of this Agreement prior to such termination.
14. No Waiver. Any waiver by any Party of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement. The failure of a Party to insist upon strict adherence to any term of this Agreement on one or more occasions shall not be considered a waiver or deprive that Party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.
15. Entire Agreement. This Agreement contains the entire understanding of the Parties with respect to the subject matter hereof and may be amended only by an agreement in writing executed by the Parties hereto.
16. Notices. All notices, consents, requests, instructions, approvals and other communications provided for herein and all legal process in regard hereto shall be in writing and shall be deemed validly given, made or served, if (a) given by email, when email is sent to the email address set forth below and the appropriate confirmation is received or (b) if given by any other means, when actually received during normal business hours at the address specified in this subsection:
if to the Company:
Commercial Vehicle Group, Inc.
7800 Walton Parkway
7800 Walton Parkway
New Albany, Ohio 43054
Attention: Aneezal H. Mohamed, Chief Legal Officer, Compliance Officer and Secretary,
Email: Aneezal.Mohamed@cvgrp.com
Attention: Aneezal H. Mohamed, Chief Legal Officer, Compliance Officer and Secretary,
Email: Aneezal.Mohamed@cvgrp.com
with a copy to:
Gibson, Dunn & Crutcher LLP
1700 M Street NW
Washington DC 20036
Attention: Stephen I Glover, Esq.
1700 M Street NW
Washington DC 20036
Attention: Stephen I Glover, Esq.
Email: siglover@gibsondunn.com
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if to Lakeview:
LIG Fund Management, LLC
444 W. Lake Street, Suite 1900
Chicago, IL, 60606
Attention: Ari B. Levy
Attention: Ari B. Levy
Email: ari@lakeviewig.com
with a copy to:
Olshan Frome Wolosky LLP
1325 Avenue of the Americas
New York, NY 10019
Attention: Meagan Reda, Esq.
1325 Avenue of the Americas
New York, NY 10019
Attention: Meagan Reda, Esq.
Email: mreda@olshanlaw.com
17. Severability. If at any time subsequent to the date hereof, any provision of this Agreement shall be held by any court of competent jurisdiction to be illegal, void or unenforceable, such provision shall be of no force and effect, but the illegality or unenforceability of such provision shall have no effect upon the legality or enforceability of any other provision of this Agreement.
18. Counterparts. This Agreement may be executed in two or more counterparts which together shall constitute a single agreement.
19. Successors and Assigns. This Agreement shall not be assignable by any of the Parties to this Agreement. This Agreement, however, shall be binding on successors of the Parties hereto.
20. No Third-Party Beneficiaries. This Agreement is solely for the benefit of the Parties hereto and is not enforceable by any other persons.
21. Interpretation and Construction. Each of the Parties hereto acknowledges that it has been represented by counsel of its choice throughout all negotiations that have preceded the execution of this Agreement, and that it has executed the same with the advice of said independent counsel. Each Party and its counsel cooperated and participated in the drafting and preparation of this Agreement and the documents referred to herein, and any and all drafts relating thereto exchanged among the Parties shall be deemed the work product of all of the Parties and may not be construed against any Party by reason of its drafting or preparation. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against any Party that drafted or prepared it is of no application and is hereby expressly waived by each of the Parties hereto, and any controversy over interpretations of this Agreement shall be decided without regard to events of drafting or preparation. The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. The term “including” shall be deemed to mean “including without limitation” in all instances.
[Signature Pages Follow]
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IN WITNESS WHEREOF, each of the Parties hereto has executed this Agreement, or caused the same to be executed by its duly authorized representative as of the date first above written.
COMMERCIAL VEHICLE GROUP, INC.
By: /s/ Aneezal H. Mohamed
Name: Aneezal H. Mohamed
Title: Chief Legal Officer
LAKEVIEW OPPORTUNITY FUND, LLC
By: Lakeview Opportunity Fund GP, LLC, its Managing Member
By: /s/ Ari B. Levy
Name: Ari B. Levy
Title: Manager
LAKEVIEW OPPORTUNITY FUND GP, LLC
By: /s/ Ari B. Levy
Name: Ari B. Levy
Title: Manager
LIG FUND MANAGEMENT, LLC
By: /s/ Ari B. Levy
Name: Ari B. Levy
Title: Manager
5004571307.12
Schedule A
Lakeview Opportunity Fund, LLC
Lakeview Opportunity Fund GP, LLC
LIG Fund Management, LLC
Ari B. Levy
5004571307.12
Exhibit A
Attention: Board of Directors
Commercial Vehicle Group, Inc.
7800 Walton Parkway
New Albany, Ohio 43054
Ladies and Gentlemen:
This letter is delivered pursuant to Section 1(b) or Section 1(c) of the Support Agreement, dated as of February 5, 2026 (the “Agreement”), by and among Commercial Vehicle Group, Inc. and Lakeview (as defined therein). Capitalized terms used herein but not defined shall have the meaning set forth in the Agreement.
In connection with the Agreement, I hereby consent to serve as a director of the Company effective February 5, 2026.
I further represent and agree that: (A) I am not and will not become a party to any agreement, arrangement or understanding with, and have not given any commitment or assurance to, any person or entity (1) as to how I will act or vote on any issue or question as a director of the Company or (2) that could limit or interfere with my ability to comply with my fiduciary duties as a director of the Company under applicable law, (B) I am not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Company with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director or nominee that has not been disclosed in my questionnaire to the Company, (C) I will comply with the Company’s Code of Conduct, ethical conduct guidelines, securities trading policies, anti-hedging policies, Regulation FD-related policies, director confidentiality policies and corporate governance guidelines, and preserve the confidentiality of Company business and information and (D) I will provide the Company such other information as the Company may reasonably request, including such information reasonably necessary for the Company to determine whether I will satisfy any qualifications or requirements imposed by the Company’s Certificate of Incorporation or the Company’s Bylaws, any law, rule, regulation or listing standard that may be applicable to the Company, or relevant to a determination whether I can be considered an independent director, which information shall be promptly provided following a request therefor.
Sincerely, | ||
Name: Ari B. Levy | ||
5004571307.12
Exhibit B
Attention: Board of Directors
Commercial Vehicle Group, Inc.
7800 Walton Parkway
New Albany, Ohio 43054
Ladies and Gentlemen:
This irrevocable resignation is delivered pursuant to Section 1(b) or 1(c) of the Support Agreement, dated as of February 5, 2026 (the “Agreement”), by and among Commercial Vehicle Group, Inc. and Lakeview (as defined therein). Capitalized terms used herein but not defined shall have the meaning set forth in the Agreement.
Effective only upon, and subject to, (A) (1) such time as Lakeview ceases to Beneficially Own an aggregate Net Long Position equal to at least the Minimum Ownership Threshold or (2) Lakeview or any Lakeview Affiliate breaches in any material respect any of the terms of the Agreement and such breach has not been cured in accordance with Section 1(f) of the Agreement, and (B) the Board’s acceptance of this resignation, I hereby resign from my position as a director of the Company and from any and all committees of the Board on which I serve.
Sincerely, | ||
Name: Ari B. Levy | ||
5004571307.12
Exhibit C
Press Release
CVG ANNOUNCES APPOINTMENT OF ARI LEVY TO BOARD OF DIRECTORS
NEW ALBANY, OHIO (February 6, 2026) – Commercial Vehicle Group (the “Company or “CVG”) (NASDAQ: CVGI), a diversified industrial products and services company, today announced that its Board of Directors (“Board”) appointed Ari Levy of Lakeview Investment Group (“Lakeview”) as an independent director. Lakeview owns approximately 8.9% of the outstanding shares of the Company. In connection with Mr. Levy’s appointment, the Board was expanded to 7 members. Mr. Levy will serve on the Board’s Nominating, Governance and Sustainability, and Audit Committees.
Mr. Levy is the founder, President, and Chief Investment Officer of Lakeview Investment Group, a Chicago based Investment Manager focused on the public markets. Mr. Levy was the President of Levy Acquisition Corp, a NASDAQ listed acquisition vehicle, and subsequently served on the Board of the resulting public company, Del Taco (TACO), until it was acquired by Jack in the Box (JACK) in early 2022. Ari holds a B.A. in International Relations from Stanford University.
“We are excited to welcome Ari to the Board,” said William Johnson, Chair of the Board of Directors. “His background and experience as a founder, operator, and investor will be valuable assets as we look to drive long-term value creation.”
“I am thrilled to join the CVG Board of Directors,” Ari Levy said. “I look forward to working alongside my fellow board members to help guide the Company into the future and maximize value for all stakeholders.”
Mr. Levy will stand for re-election at the Company’s 2026 Annual Meeting of Stockholders.
In connection with the appointment of Mr. Levy to the Board, the Company and Lakeview entered into a support agreement that contains customary standstill provisions.
Company Contact
Andy Cheung
Chief Financial Officer
CVG
IR@cvgrp.com
Investor Relations Contact
Ross Collins or Nathan Skown
Alpha IR Group
CVGI@alpha-ir.com
About CVG
CVG is a global provider of systems, assemblies and components to the global commercial vehicle market and the electric vehicle market. We deliver real solutions to complex design, engineering and
5004571307.12
manufacturing problems while creating positive change for our customers, industries and communities we serve. Information about the Company and its products is available on the internet at www.cvgrp.com.
5004571307.12
200 National Drive, Vonore, Tennessee
Exhibit 10.1
PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is made as of the Effective Date by and between CVG NATIONAL SEATING COMPANY, LLC, a Delaware limited liability company (“Seller”) and BIG ACQUISITIONS LLC, an Illinois limited liability company (“Purchaser”).
Background
A. Seller owns the Property;
B. Subject to the terms and conditions hereinafter specified, Purchaser desires to purchase from Seller, and Seller desires to sell to Purchaser, the Property;
C. Tenant is affiliated with Seller and will derive certain and direct benefit from Purchaser purchasing the Property from Seller; and
D. Subject to the terms and conditions hereinafter specified, Purchaser desires to lease the Property to Tenant, and Tenant desires to lease the Property from Purchaser, from and after the Closing Date in accordance with the Lease.
NOW, THEREFORE, in consideration of the premises, and the mutual covenants herein contained and for other valuable consideration, each to the other given and obtained, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
Terms
1.Preamble, Exhibits, Definitions. The preamble hereto and the Exhibits are incorporated herein by this reference and made a part of this Agreement. Capitalized words or phrases used but not otherwise defined in this Agreement shall have the meanings ascribed to them herein.
2.Purchase and Sale Agreement; Price. Subject to the terms and conditions hereinafter specified, Purchaser agrees to purchase from Seller, and Seller agrees to sell to Purchaser, the Property for the Price, subject to the adjustments thereto specified in Paragraph 13 hereof.
3.Escrow. Concurrently with the execution of this Agreement, the parties hereto, through their respective counsel, shall establish the Escrow.
4.Earnest Money; Independent Consideration. Within three (3) business days after the Effective Date, Purchaser shall deposit with Escrowee the Earnest Money. The Earnest Money shall be held in the Escrow and disbursed in accordance with the provisions of the Escrow Agreement. In addition to the Earnest Money, concurrently with Purchaser’s execution and delivery of this Agreement to Seller, Purchaser shall pay to Seller the amount of $100.00. Seller and Purchaser hereby mutually acknowledge and agree that such sum represents adequate bargained for consideration for Seller’s execution and delivery of this Agreement and Purchaser’s right to inspect the Property. Said sum is in addition to and independent of any other consideration or payment provided for in this Agreement and is nonrefundable in all events.
28302917.3
5.Purchaser Investigations and Elections. Subject to all limitations hereinafter specified and the terms and conditions of that certain Access and Indemnification Agreement by and between Seller and Purchaser of even date herewith (the “Access and Indemnification Agreement”), Purchaser shall have the right through the Diligence Date and thereafter to the Closing Date, so long as Purchaser has not terminated this Agreement prior to Closing in accordance with this Paragraph 5 or any other provision herein affording Purchaser such rights, to make such investigations and evaluations of the Property as Purchaser deems necessary or desirable. In connection with such investigations, Purchaser shall cause the information disclosed to or acquired by it or its Property Consultants in connection with the inspections and reviews described in this Paragraph 5, the Access and Indemnification Agreement, or otherwise provided by Seller pursuant to any other paragraph of this Agreement, to the extent such information is not a matter of public knowledge or readily available to the public, to be held in confidence and not disclosed prior to the Closing Date to any party other than as may be (i) reasonably required in connection with Purchaser investigating and evaluating the Property, obtaining financing or management services for the Property or obtaining licenses to operate the Property, (ii) necessary to enforce the terms and conditions of this Agreement, or (iii) required by applicable law. Purchaser shall have the right through the Diligence Date to terminate this Agreement, if Purchaser, in its sole and exclusive discretion, decides not to pursue the acquisition of the Property, by giving Seller Notice of the exercise by Purchaser of its right to so terminate prior to 11:59 p.m. (Chicago time) on the Diligence Date. In the event that the Closing hereunder shall not occur for any reason whatsoever, Purchaser shall promptly return to Seller or destroy copies of all Property Documents delivered by Seller to Purchaser.
6.Title and Survey Matters.
(a)Seller shall convey to Purchaser or Purchaser’s Grantee, if any, by a recordable special warranty deed (the “Deed”), fee simple title to the Real Property and such other estates, if any, as comprise the Appurtenances, subject only to the Permitted Title Exceptions. At least twenty (20) days prior to the Diligence Date, Purchaser may order (i) the Title Commitment; and (ii) the Survey. No later than ten (10) days prior to the Diligence Date (the “Objection Deadline”), Purchaser may give Notice to Seller of any Title Matters or Survey Matters. Seller may, but shall not be obligated to, cure each Title Matter or Survey Matter by taking such action as will induce the Title Insurer to eliminate such Title Matter or Survey Matter from the Title Commitment and/or may induce the surveyor providing the Survey to amend the same to show the absence of any such Title Matter or Survey Matter, and if not curable, may, but shall not be obligated to, cause the Title Insurer to insure Purchaser against loss or damage resulting therefrom as an Insured Exception, pursuant to an endorsement or other express coverage in form and substance reasonably acceptable to Purchaser; provided, however, Purchaser shall have no obligation to accept insurance over any Title Matter or Survey Matter. No later than five (5) days prior to the Diligence Date (the “Response Deadline”), Seller shall give Purchaser Notice of those Title Matters or Survey Matters which Seller is able and willing to cure in the manner aforesaid or for which Seller is able and willing to obtain one or more of the title insurance endorsements described above. If Seller does not so notify Purchaser by the Response Deadline that Seller is able and willing to cure the Title Matters and Survey Matters (or any of them) or cause the Title Insurer to insure over same in the manner aforesaid, Seller shall be deemed to have elected not to cure or cause such Title Matters or Survey Matters to be waived, cured or insured over at or prior to Closing; whereupon, Purchaser shall have the right to terminate this Agreement prior to the Diligence Date in the manner set forth in Paragraph 5 above. If Purchaser does not terminate this Agreement in accordance with Paragraph 5 hereof, Title Matters and Survey Matters which Seller is not obligated to cause to be waived, cured or insured over prior to Closing shall be deemed added to and made a part of the Permitted Title Exceptions. If Seller does so notify Purchaser by the Response Deadline that Seller is
2
28302917.3
able and willing to cure the Title Matters and Survey Matters or cause the Title Insurer to insure over same in the manner aforesaid, Seller shall be obligated to do so at or prior to Closing, and failure in respect of any such obligation shall be a default by Seller hereunder.
(b)If on or prior to the Closing Date, Purchaser discovers any exceptions to title which do not appear in the Title Commitment and which materially and adversely affect the use of the Property (“New Title Matters”), Purchaser may elect, upon written notice to Seller, to (x) terminate this Agreement by giving Seller Notice of its election to do so on or before the Closing Date whereupon the Escrow shall be terminated, the respective deposits returned within five (5) days thereafter (and Seller and Purchaser shall so direct Escrowee), and provided the New Title Matters are created as a result of the acts or omissions of Seller, Seller’s agents or Seller’s affiliates, Seller shall reimburse Purchaser for Purchaser’s Costs or (y) take title as it then is (subject to the New Title Matters), with appropriate adjustment to the Price, to the extent that the same is a monetary lien such as those described in clauses (1) through (3) of Paragraph 6(c) below.
(c)Notwithstanding anything to the contrary in this Paragraph 6, on or before the Closing Date, Seller shall discharge (1) any existing financing on the Property; (2) liens evidencing monetary encumbrances (other than liens for non-delinquent general real estate taxes); (3) other liens which can be removed by payment of liquidated amounts, including without limitation delinquent taxes and assessments; and (4) New Title Matters and any other liens or encumbrances created by Seller or its agents and affiliates after the effective date of the Title Commitment. Seller’s failure in respect of its obligation to cause the discharge of any of the foregoing shall be a default by Seller hereunder.
7.Representations and Warranties of Seller. To induce Purchaser to execute, deliver and perform its obligations under this Agreement, Seller hereby represents and warrants to Purchaser on and as of the date hereof as follows:
(a)To the best of Seller’s knowledge, all information disclosed in each of the Property Documents which have heretofore been delivered to Purchaser was substantially true and correct as of the date when delivered and as to such Property Documents to be delivered shall be substantially true and correct as of the date when so delivered.
(b)Except for Seller and Tenant, there are no persons in possession or occupancy of the Real Property or any part thereof, nor are there any persons who have possessory rights in respect to the Real Property or any part thereof. There are no options, puts, calls, rights of first offer, opportunity or refusal, or other preemptive rights to purchase or occupy the Property.
(c)Seller is duly organized or formed, validly existing, and in good standing under the laws of the state of its formation and is duly authorized to transact business in under the laws of the state where the Real Property is located.
(d)Seller has full capacity, right, power and authority to execute, deliver and perform this Agreement and all documents to be executed by Seller pursuant hereto; all required action and approvals therefore have been duly taken and obtained, and the individuals signing this Agreement and all other documents executed pursuant hereto on behalf of Seller are duly authorized to sign the same on Seller’s behalf and to bind Seller thereto; and to the best of Seller’s knowledge, Seller’s execution of and performance
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under this Agreement shall not constitute a breach of any agreement, understanding, order, judgment or decree, written or oral, to which Seller is a party, or to which any part of the Property may be subject, or by which Seller may be bound, and to the best of Seller’s knowledge shall not constitute a violation of any provision of law, state, federal or municipal, statutory or otherwise, to which Seller or the Property is or may become subject; and this Agreement and all documents to be executed pursuant hereto by Seller are and shall be binding upon and enforceable against Seller in accordance with their respective terms.
(e)Seller is not a foreign corporation, foreign partnership, foreign trust or foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations).
(f)To the best of Seller’s knowledge, the Real Property currently complies with all applicable zoning, building, environmental and other laws, ordinances, codes, and regulations.
(g)Seller has not received any notice of any fire, health, safety, building, pollution, environmental, zoning or other violations of law in respect to the Real Property, which have not been fully disclosed to Purchaser and entirely corrected, and Seller has not received any notice from any insurance company, inspector or rating bureau making requirements as a condition to the continuation of insurance on or with respect to the Property which have not heretofore been fully disclosed to Purchaser and satisfied in full.
(h)To the best of Seller’s knowledge, there is no existing, pending, contemplated, threatened or anticipated, (i) condemnation of any part of the Real Property, or (ii) widening, change of grade or limitation on the use of streets abutting the Property.
(i)There are no contracts, agreements, leases, licenses, invoices, bills or understandings of any nature, written or oral, formal or informal to which Seller or Tenant is a party or otherwise bound, other than the Lease and the Service Contracts (if any), which Purchaser, upon becoming owner of the Property, will be required to assume or pay or to which Purchaser, as a consequence of entering into or closing this Agreement, may become bound without Purchaser’s express and prior written consent.
(j)Each of the Licenses, Warranties and Service Contracts is in full force and effect, and neither Seller nor, to Seller’s knowledge, any counterparty thereto is in default of its obligations thereunder, and no event has occurred nor circumstance arisen which, with the giving of notice, the passage of time, or both, would constitute a default thereunder.
(k)There are no judgments or decrees of any kind affecting the Property that are unpaid or unsatisfied of record; the Property is not in the hands of a receiver; no application for any such receivership is pending; no petition in bankruptcy has been filed by or against Seller, and there are no claims, causes of action, proceedings, litigation or investigations pending or, to the best of Seller’s knowledge, threatened against or affecting Seller or the Property (including disputes with governmental authorities, utilities, contractors, adjoining land owners), and no basis known to Seller for the same, which, if decided adversely, would affect Seller’s ability to carry out the transaction or closing contemplated by this Agreement or would interfere with or prevent the use of the Property for its industrial purposes.
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(l)Except to the extent otherwise expressly disclosed in any report pertaining to the Property obtained by Purchaser prior to the Closing Date: (i) to the best of Seller’s knowledge, Seller and the Property are currently in compliance with all, and otherwise not liable under any, applicable Environmental Laws, and the Seller has not, and to the best of Seller’s knowledge, none of its predecessors in title to, or in possession of the Property, has violated or been found otherwise liable under any applicable Environmental Law; (ii) Seller has not, and to the best of Seller’s knowledge, none of its predecessors has used, handled, generated, treated, spilled, discharged, emitted, recycled, stored, transported, disposed of or released any Hazardous Materials on or from the Property except to the extent the same was permitted by, or remediated in accordance with, applicable Environmental Laws and Seller does not use, handle, generate, treat, discharge, emit, recycle, release, dispose, maintain and store Hazardous Materials in, on or about the Real Property that are not stored or contained in accordance with applicable Environmental Laws; and (iii) to the best of Seller’s knowledge, there are no and have never been any underground storage tanks in the Land.
(m)Neither Seller nor any person controlling Seller (i) is included on any Government List (as hereinafter defined); (ii) has been determined by competent authority to be subject to the prohibitions contained in Presidential Executive Order No. 133224 (September 23, 2001) or in any enabling or implementing legislation or other Presidential Executive Orders in respect thereof; (iii) has been previously indicted for or convicted of any felony involving a crime or crimes of moral turpitude or for any offense under the criminal laws against terrorists, the criminal laws against money laundering, the Bank Secrecy Act, as amended, the Money Laundering Control Act of 1986, as amended, or the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorists (USA PATRIOT ACT) Act of 2001, Public Law 107-56 (October 26, 2001), as amended; or (iv) to Seller’s knowledge, is currently under investigation by any governmental authority for alleged criminal activity. For purposes of this Agreement, the term “Government List” means (1) the Specialty Designated Nationals and Blocked Persons Lists maintained by the Office of Foreign Assets Control, United States Department of the Treasury (“OFAC”), (2) the Denied Persons List and the Entity List maintained by the United States Department of Commerce, (3) the List of Terrorists and List of Disbarred Parties maintained by the United States Department of State, (4) any other list of terrorists, terrorist organizations or narcotics traffickers maintained pursuant to any of the lists, laws, rules and regulations maintained by OFAC pursuant to any authorizing statute, Executive Order or regulation, (5) any other similar list maintained by the United States Department of State, the United States Department of Commerce or any other governmental authority or pursuant to any Executive Order of the President of the United States of America, and (6) any list or qualification of “Designated Nationals” as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515, as all such Government Lists may be updated from time to time.
As used in this Agreement, the phrase “to the best of Seller’s knowledge” means with respect to any statement following such phrase that to the date hereof no information has come to the attention of Seller’s manager or president in the normal course of performing management responsibilities for the Property, or otherwise. If, prior to the Closing Date, any event or change in circumstances occurs, through no fault of Seller, which causes one or more of the foregoing representations and warranties to be no longer true and correct, Seller shall inform Purchaser of such fact within three (3) days after Seller learns of the occurrence of such change in circumstances (but in no event later than the Closing Date). The representations and warranties of Seller specified above shall be deemed remade as of the Closing Date, unless and except to the
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extent modified in accordance with the preceding sentence. All of the representations and warranties specified in this Paragraph 7, as remade on the Closing Date, as aforesaid, shall survive for a period of one (1) year after the Closing Date (except that the representations and warranties specified in Paragraph 7(m) shall survive for the applicable statute of limitations period) but not thereafter unless (i) Purchaser shall have given Seller Notice of an alleged breach of such representation or warranty within said survival period, or (ii) Purchaser’s failure to discover such breach shall have been caused by the act or omission of Seller constituting common law fraud, in either of which events the representation or warranty shall continue to survive. Seller shall defend, indemnify and hold Purchaser harmless from and against any and all damage, cost, liability and expense resulting from any material breach of any of the representations and warranties specified herein. Any investigation or inspection conducted by Purchaser in order to verify independently Seller’s satisfaction of any conditions precedent to Purchaser’s obligations hereunder and/or the truth and accuracy of Seller’s representations and warranties specified herein shall not in any way abrogate any of said representations and warranties or constitute any waiver by Purchaser of its reliance thereon, unless prior to the Closing Date, Purchaser receives written or other documentary evidence of facts which would make any of the aforesaid representations and warranties materially untrue or inaccurate and fails to disclose such facts to Seller prior to the Closing Date. If prior to the Closing Date, Seller takes such action as cures or mitigates to Purchaser’s satisfaction any adverse effect on Purchaser resulting from any such breach of warranty or representation of which Purchaser gives it Notice, as aforesaid, such breach shall be deemed cured and of no further force or effect hereunder.
PURCHASER HEREBY ACKNOWLEDGES THAT, EXCEPT AS EXPRESSLY SET FORTH IN PARAGRAPH 7 AND IN THE DOCUMENTS TO BE DELIVERED BY SELLER AT CLOSING, NEITHER SELLER, NOR ANY PERSON ACTING ON BEHALF OF SELLER, NOR ANY PERSON OR ENTITY WHICH PREPARED OR PROVIDED ANY OF THE MATERIALS REVIEWED BY PURCHASER IN CONDUCTING ITS DUE DILIGENCE, NOR ANY DIRECT OR INDIRECT OFFICER, DIRECTOR, PARTNER, MEMBER, SHAREHOLDER, EMPLOYEE, AGENT, REPRESENTATIVE, ACCOUNTANT, ADVISOR, ATTORNEY, PRINCIPAL, AFFILIATE, CONSULTANT, CONTRACTOR, SUCCESSOR, OR ASSIGN OF ANY OF THE FOREGOING PARTIES HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY ORAL OR WRITTEN REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESSED OR IMPLIED, BY OPERATION OF LAW OR OTHERWISE (INCLUDING WITHOUT LIMITATION WARRANTIES OF HABITABILITY, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE), WITH RESPECT TO THE PROPERTY, THE PERMITTED USE OF THE PROPERTY, OR THE ZONING AND OTHER LAWS, REGULATIONS, AND RULES APPLICABLE THERETO OR THE COMPLIANCE BY THE PROPERTY THEREWITH.
8.Representations and Warranties of Purchaser. Purchaser represents and warrants to Seller that:
(a)Purchaser is a limited liability company, duly organized, validly existing, and in good standing under the laws of the state of its formation and is or as of Closing will be duly authorized to transact business in under the laws of the state where the Real Property is located.
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(b)Purchaser has full capacity, right, power and authority to execute, deliver and perform this Agreement and all documents to be executed by Purchaser pursuant hereto; all required action and approvals therefore have been duly taken and obtained, and the individuals signing this Agreement and all other documents executed pursuant hereto on behalf of Purchaser are duly authorized to sign the same on Purchaser’s behalf and to bind Purchaser thereto; and to the best of Purchaser’s knowledge, Purchaser’s execution of and performance under this Agreement shall not constitute a breach of any agreement, understanding, order, judgment or decree, written or oral, to which Purchaser is a party or by which Purchaser may be bound, and to the best of Purchaser’s knowledge shall not constitute a violation of any provision of law, state, federal or municipal, statutory or otherwise, to which Purchaser is or may become subject; and this Agreement and all documents to be executed pursuant hereto by Purchaser are and shall be binding upon and enforceable against Purchaser in accordance with their respective terms.
(c)Neither Purchaser nor any person controlling Purchaser (i) is included on any Government List; (ii) has been determined by competent authority to be subject to the prohibitions contained in Presidential Executive Order No. 133224 (September 23, 2001) or in any enabling or implementing legislation or other Presidential Executive Orders in respect thereof; (iii) has been previously indicted for or convicted of any felony involving a crime or crimes of moral turpitude or for any offense under the criminal laws against terrorists, the criminal laws against money laundering, the Bank Secrecy Act, as amended, the Money Laundering Control Act of 1986, as amended, or the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorists (USA PATRIOT ACT) Act of 2001, Public Law 107-56 (October 26, 2001), as amended; or (iv) to Purchaser’s knowledge, is currently under investigation by any governmental authority for alleged criminal activity.
(d)Except for the express representations and warranties of Seller found in Section 7, Purchaser is acquiring the Property on an "AS IS, WHERE IS" basis, without any representation or warranty of any kind or nature whatsoever, express or implied, and Purchaser acknowledges that no such representations or warranties have been made except as set forth in writing herein. In deciding whether to acquire the Property, Purchaser is relying solely on Purchaser's investigation of the Property.
As used in this Agreement, the phrase “to the best of Purchaser’s knowledge” means with respect to any statement following such phrase that to the date hereof no information has come to the attention of any of Purchaser’s agents in the normal course of Purchaser’s business, or otherwise.
9.Conditions Precedent to Respective Obligations.
(a)Purchaser’s obligations under this Agreement are subject to the conditions precedent that:
(i)Seller shall have fully and timely performed all material obligations under this Agreement;
(ii)Seller’s representations and warranties set forth in this Agreement shall be true and accurate in all material respects;
(iii)If the Property is subject to any reciprocal easement agreements, agreement of covenants, conditions, and restrictions, or similar documents (each, a “Restrictions Agreement”), Purchaser shall receive at least three (3) business
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days (and not more than thirty (30) days) before the Closing Date, an estoppel certificate (each, a “Restrictions Estoppel”) from the party designated to provide such Restrictions Estoppel under such Restrictions Agreement, which Restrictions Estoppel shall state, among other things, that there are no defaults by Seller or claims against Seller arising out of such Restrictions Agreement and shall otherwise be in form and substance reasonably acceptable to Purchaser. Purchaser shall prepare each such Restrictions Estoppel and forward such Restrictions Estoppels to the Seller for distribution to the appropriate parties not later than the Diligence Date. Provided Seller uses reasonable efforts to obtain the same, Seller’s failure to obtain all Restrictions Estoppels shall not be a default under this Agreement.
(iv)Seller shall deliver a subordination agreement (the “SNDA”) executed by the Tenant in favor of Purchaser’s lender, which SNDA shall be in a form acceptable to Purchaser’s lender.
(v)No change shall have occurred or be threatened with respect to the physical or legal condition of the Property that would materially adversely affect the findings made prior to the Diligence Date; and
(vi)No material adverse change shall have occurred in the financial condition of Tenant.
10.In the event any of the foregoing conditions precedent is not satisfied and Purchaser does not expressly elect to waive the same, Purchaser shall have the right to terminate this Agreement by giving Seller Notice of its election to do so on or before the Closing Date whereupon the Escrow shall be terminated, the respective deposits returned within five (5) days thereafter, and except as otherwise specified in Paragraph 7 hereof respecting a breach of warranty for which Seller is responsible, this Agreement shall have no further force or effect, except as otherwise specified in Paragraph 27 hereof.
(b)Seller’s obligations under this Agreement are subject to the conditions precedent that:
(i)Purchaser shall have fully and timely performed all material obligations under this Agreement; and
(ii)Purchaser’s representations and warranties set forth in this Agreement shall be true and accurate in all material respects.
11.In the event any of the foregoing conditions precedent is not satisfied and Seller does not expressly elect to waive the same, Seller shall have the right to terminate this Agreement by giving Purchaser Notice of its election to do so on or before the Closing Date whereupon the Escrow shall be terminated, Seller shall have the right to pursuant the Earnest Money pursuant to Paragraph 17, and this Agreement shall have no further force or effect, except as otherwise specified in Paragraph 27 hereof.
12.Maintenance and Operation of Property Prior to Closing Date.
(a)From and after the Effective Date to the Closing Date, Seller shall refrain from transferring or encumbering any of the Property and, subject to interruptions
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attributable to causes beyond Seller’s reasonable control, shall continue the operations of the Property in compliance with all laws and in substantially the same manner as they currently are being conducted including, but not limited to, providing normal and regular upkeep, maintenance and repairs for the Property, and maintaining in force insurance coverage the same as the coverages which currently are in force. As long as this Agreement remains in full force, Seller shall not (i) remove any fixtures except in the normal course of operating the Real Property provided that replacements therefore are made which are equal or better in quality and design as that being replaced, (ii) create any cloud on title to the Property which is not otherwise a Permitted Title Exception; or (iii) enter into any lease without the prior written consent of Purchaser. Prior to Closing, Seller shall maintain all insurance policies in full force and effect, with insurance coverage at levels ordinarily maintained by Seller.
(b)Prior to the Closing Date, Seller shall arrange, at Seller’s sole cost and expense, for any and all municipal inspections of the Property, required to consummate this transaction (including any municipal inspections required as a condition to the issuance of transfer stamps). To the extent any such inspections require repairs to the Property as a condition to the sale of the Property or the issuance of transfer stamps, prior to Closing, Seller shall complete such repairs at Seller’s sole cost and expense.
(c)Prior to Closing, Seller shall promptly (in any event, within two (2) business days) deliver to Purchaser copies of any and all written notices received by Seller or its agents or employees from any governmental authorities, insurance companies, or other third parties alleging any violation of law, defect in the Property, or other circumstance which could reasonably lead to litigation involving Seller or the Property or render any of Seller’s representations and warranties set forth in this Agreement to be untrue in any material respect.
13.Service Contracts. Notwithstanding any other provision of this Agreement to the contrary, unless Purchaser informs Seller in writing prior to the Diligence Date, which, if any, Service Contracts Purchaser desires to have assigned to it by Seller, Seller shall (a) in its capacity as Tenant, retain all of its rights, titles and interests in, to and under any and all such Service Contracts from and after Closing in such capacity, or (b) if Seller’s Affiliate will serve as Tenant, assign all of its rights, titles and interests in, to and under any and all such Service Contracts from and after Closing to Tenant.
14.Closing.
(a)Subject to Purchaser’s right to terminate this Agreement prior to the Closing, as set forth herein, the Closing shall occur on the Closing Date.
(b)On or prior to the Closing Date, Seller will deliver the following to Escrowee:
(i)the Deed;
(ii)Seller’s counterpart of all transfer tax declarations for the deed deposited herein by Seller;
(iii)If applicable, duplicate counterparts of the Assignment and Assumption Agreement;
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(iv)duplicate counterparts of the Lease as executed by the Tenant, together with any security deposit or other security required to be delivered in connection therewith;
(v)a recertification, as of the Closing Date, of Seller’s representations and warranties specified in Paragraph 7;
(vi)a certificate in the form prescribed by the Internal Revenue Service pursuant to Section 1445(b)(4) of the Internal Revenue Code (the “Code”) that Seller is not a foreign person as that term is defined in the Code;
(vii)a statement from Seller’s Broker indicating the commission due it and relinquishing any and all liens associated therewith;
(viii)Seller’s “ALTA Statement” or other customary owner’s or seller’s affidavit certifying that there are no mechanics’ or materialmen’s liens nor any other exception to the assurances specified therein, except for Permitted Title Exceptions;
(ix)a “Gap Undertaking” duly executed on behalf of Seller for the period from the most recent effective date of the Title Commitment and the Closing Date;
(x)evidence of the discharge of any Title Matters or Survey Matters required pursuant to Paragraph 6 above; and
(xi)such other affidavits, certifications, and other documents as may be required by the Title Insurer for Seller to satisfy its requirements set forth in the Title Commitment or otherwise reasonably requested by the Title Insurer to consummate this transaction pursuant to this Agreement.
(c)On or prior to the Closing Date, Purchaser will deliver the following to Escrowee:
(i)Purchaser’s counterpart of all transfer tax declarations for the deed deposited herein by Seller;
(ii)If applicable, duplicate counterparts of the Assignment and Assumption Agreement;
(iii)duplicate counterparts of the Lease as executed by Purchaser;
(iv)such other affidavits, certifications, and other documents as may be required by the Title Insurer for Purchaser to satisfy its requirements set forth in the Title Commitment or otherwise reasonably requested by the Title Insurer to consummate this transaction pursuant to this Agreement; and
(v)the balance of the Price, plus or minus prorations and credits or charges as provided herein, in immediately available federal funds.
(d)The form and substance of all documents to be deposited herein shall be subject to the reasonable approval of counsel for Purchaser and Seller.
15.Prorations, Credits and Charges.
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(a)At or prior to the Closing, Seller shall pay (i) the costs of obtaining and/or keeping in force the Title Commitment and the premiums for the owner’s Title Policy, (ii) one-half of the charges of Escrowee for administering the Escrow, (iii) the amounts required to obtain and record the release of all liens and encumbrances, if any, affecting the Property (unless the same is an Insured Exception) and which Seller is obligated to cause to be released pursuant to Paragraph 6, (iv) the cost of the Survey, and (v) the charges of Seller’s counsel and other advisors to Seller including, but not limited to, Seller’s Broker. Purchaser shall be responsible for paying (1) one-half of the charges of Escrowee for administering the Escrow, (2) the premiums for title insurance required in connection with any loan policy of title insurance issued in connection with this transaction, (3) the premiums for the lender’s Title Policy and any title insurance endorsements; (4) all state, county and municipal taxes imposed by law on the transfer of title to the Property, (5) all of the charges of Escrowee for administering any separate money lender’s escrow agreement in connection with this transaction, and (6) recording costs for recording the deed of conveyance and all mortgage loan documents.
(b)As of the Closing Date, pre-paid charges for Licenses and Service Contracts assigned to Purchaser shall be prorated on an accrual basis on the basis of the most recent ascertainable amounts of or other reliable information in respect to each such item of income and expense, and the net credit to Purchaser or Seller shall be paid in cash on the Closing Date.
(c)Seller shall be responsible for the payment of all real estate taxes and special assessments attributable to the Property and due and payable on or before the Closing Date.
(d)Except as aforesaid, there shall be no proration of revenues and expenses with respect to the Property at Closing, and the benefit and burden of such revenues and expenses shall be borne by Seller prior to Closing and shall be borne by Tenant from and after Closing in accordance with the Lease.
16.Possession. Except for Tenant, possession of the Property shall be delivered on the Closing Date free of any occupants or parties claiming any possessory interest therein.
17.Destruction or Damage. If after the Diligence Date and prior to the Closing Date, the Improvements shall be destroyed or damaged in an amount in excess of $250,000.00 by fire, vandalism or other casualty, then Purchaser shall have the right and option to terminate this Agreement by giving Seller Notice to such effect, within the later of (i) twenty (20) days after the date of receipt by Purchaser of Notice from Seller of such fire or other casualty or (ii) five (5) days after the determination of the amount of such damages as provided in this paragraph. Should Purchaser elect to so terminate this Agreement, the Earnest Money shall be returned forthwith to Purchaser within five (5) days after Notice of such election, and thereupon the parties hereto shall be released from any and all further obligations hereunder, except as otherwise specified in Paragraph 27 hereof. In the event of fire, vandalism or other casualty causing damage in the amount of $250,000.00 or less, (or more than $250,000.00, if Purchaser does not so elect to terminate), then Purchaser shall not have the right to so terminate this Agreement and in such event shall have the right to participate in the adjustment and settlement of any insurance claim relating to said damage, and at the Closing, Seller shall assign the interest of Seller in and to any insurance proceeds with respect to said damage to Purchaser, and Purchaser shall be given a credit against the Price in an amount equal to the amount deductible under the applicable insurance policies. If the Closing Date is a date prior to the expiration of the time periods specified above, the Closing shall be delayed until Purchaser makes its election within the time periods specified above.
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18.Condemnation. Prior to the Closing Date, if any proceeding, judicial, administrative or otherwise, which shall relate to the proposed taking of any portion of the Property by condemnation or eminent domain or any action in the nature of eminent domain, or the taking or closing of any right of access to the Property, is instituted or commenced, Purchaser shall have the right and option to terminate this Agreement by giving Seller Notice to such effect within ten (10) days after actual receipt of Notice from Seller of any such occurrence or occurrences or the day prior to the Closing Date, whichever is earlier. Failure of Purchaser to give such Notice within such time shall be conclusive evidence that Purchaser has waived the option to terminate by reason of the occurrence of which it has received Notice, and Purchaser shall be credited with or be assigned all Seller’s right to any proceeds therefrom. Seller hereby agrees to furnish Purchaser Notice in respect to any such proceedings within forty-eight (48) hours of Seller’s receipt of any such notification or learning of the institution of such proceedings. Should Purchaser elect to so terminate this Agreement, the Earnest Money shall be returned forthwith to Purchaser within five (5) business days after Notice of such election, and thereupon the parties hereto shall be released from any and all further obligations hereunder, except as otherwise specified in Paragraph 27 hereof. If the Closing Date is less than ten (10) days following Purchaser’s receipt of such Notice, then the Closing shall be delayed until Purchaser makes such election. Notwithstanding the foregoing, if such proceeding by way of condemnation or eminent domain shall be insubstantial, Purchaser shall not have the right to terminate this Agreement but shall be credited with or be assigned Seller’s right to any proceeds therefrom. An “insubstantial” proceeding shall be one which (i) does not relate to the taking or closing of any right of access to the Property, (ii) affects only the perimeter of the Property and does not involve more than the equivalent of $100,000.00 in value, (iii) does not enable Purchaser’s lender to terminate its loan commitment to provide financing for Purchaser’s acquisition of the Property, (iv) does not involve any material relocation of any Improvements or utility facilities serving the Property, and (v) does not cause the Property to be out of compliance with any applicable law or License.
19.Remedies for Defaults. If Purchaser defaults hereunder in any material respect prior to the Closing, and such default remains uncured five (5) days after Notice thereof from Seller to Purchaser in which the nature of the default is described with particularity, Seller shall have the right to terminate Seller’s obligations hereunder, Purchaser’s rights under this Agreement, and whatever interest in the Property is derived hereunder, by giving Notice of such election to Purchaser, in which event Seller shall be paid, and have the right to retain, the Earnest Money, which payment to Seller of the Earnest Money in respect of such default shall be Seller’s sole and exclusive remedy therefore (Seller and Purchaser each agreeing that the amount of said Earnest Money to be so paid to Seller under such circumstances is the mutually agreed upon amount of compensation to Seller for making the Property available to Purchaser on the terms and during the pendency of this Agreement, and that the payment thereof will not result in a penalty or forfeiture, and shall be in lieu of any other remedy or damages). Except with respect to a material breach of any of the representations and warranties specified in Paragraph 7, for which Seller shall defend, indemnify and hold Purchaser harmless from and against any and all damage, cost, liability and expense resulting therefrom, if Seller defaults hereunder prior to Closing in any material respect and such default remains uncured five (5) days after Notice thereof from Purchaser to Seller in which the nature of the default is described with particularity, Purchaser may elect, as Purchaser’s sole and exclusive remedy, either to: (i) terminate Purchaser’s obligations hereunder by giving Notice of such election to Seller, in which event the Earnest Money shall be returned to Purchaser, and Seller shall reimburse Purchaser for Purchaser’s Costs; provided, Seller shall have no obligation to reimburse Purchaser for Purchaser’s Costs that, in the aggregate, exceed Seventy-Five Thousand Dollars ($75,000.00), or (ii) compel Seller to perform its obligations hereunder in accordance with the terms hereof through an action for specific performance, which action must be initiated, if at all, within sixty (60) days of such default; provided, however, that to the extent that specific performance is
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unavailable or impracticable due to the acts or omissions of Seller, then Purchaser shall be entitled to pursue any and all remedies available at law or in equity.
20.No Assignments; Binding Effect. Neither party shall assign this Agreement without the other party’s prior written consent, except that Purchaser may assign its rights hereunder, without Seller’s consent, to (a) Purchaser’s Grantee; (b) any entity which will acquire the Property as part of a Section 1031 tax deferred exchange for the benefit of Purchaser pursuant to an exchange agreement with Purchaser; or (c) any entity provided that Purchaser has waived its right to terminate this Agreement pursuant to Paragraph 5. Any entity to which this Agreement is assigned pursuant to this paragraph shall expressly assume all obligations of the party assigning this Agreement.
21.Real Estate Brokers. Each party represents to the other that it has not engaged the services of, or been assisted by, any real estate broker or sales person in connection with this transaction other than Seller’s Broker to whom Seller shall pay a commission in accordance with its separate, written agreement with said firm. If any claims for brokerage commissions or fees are ever made against Seller or Purchaser in connection with this transaction by anyone other than Seller’s Broker, all such claims shall be defended and/or paid by the party whose actions or alleged commitments form the basis of such claim, and the party whose actions or commitments form the basis of such claim shall indemnify and hold harmless the other from and against any and all such claims and demands with respect to any brokerage fees or agents’ commissions or other compensation asserted by any person, firm or corporation in connection with this contract or the transactions contemplated hereby.
22.Notices. Each Notice shall be in writing and either: (a) hand delivered, (b) sent by overnight courier delivery service, (c) sent by registered or certified mail, postage prepaid, return receipt requested, or (d) sent by electronic mail transmission (to be effective upon transmission, provided receipt is confirmed or a copy of such Notice is sent in accordance with (a), (b) or (c) above). Notices shall be addressed to the respective parties, as follows:
If for Seller: c/o Commercial Vehicle Group, Inc.
7800 Walton Parkway
7800 Walton Parkway
New Albany, Ohio 43054
Attention: Legal Department
E-Mail: legal@cvgrp.com
Attention: Legal Department
E-Mail: legal@cvgrp.com
with a copy to: Steptoe & Johnson PLLC
707 Virginia Street, East, Suite 1700
Charleston, West Virginia 25301
Attention: H. Hampton Rose, IV
E-Mail: hampton.rose@steptoe-johnson.com
707 Virginia Street, East, Suite 1700
Charleston, West Virginia 25301
Attention: H. Hampton Rose, IV
E-Mail: hampton.rose@steptoe-johnson.com
If for Purchaser: BIG Acquisitions LLC
10275 W. Higgins Road, Suite 810
10275 W. Higgins Road, Suite 810
Rosemont, Illinois 60018
Attention: Michael W. Brennan
E-Mail: mbrennan@brennanllc.com
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with a copy to: Brennan Investment Group
10275 W. Higgins Road, Suite 810
Rosemont, Illinois 60018
Attention: Legal Department
E-Mail: legal@brennanllc.com
Each party hereto may from time to time specify, by giving ten (10) days’ advance Notice to each other party, (i) any other address in the United States as its address for purposes of this Agreement, and (ii) any other person or entity in the United States that is to receive copies of notices, offers, consents and other instruments hereunder. Notice under the terms of this Agreement shall be deemed delivered, whether or not actually received, upon the earlier of (x) the date of actual receipt by such party, or (y) the day after said Notice is either deposited with such overnight delivery service, or (z) the day said Notice is transmitted by facsimile or electronic mail transmission, or personally delivered, as applicable, pursuant to the above provisions. Notices hereunder may be delivered by counsel on behalf of a party hereto, and such Notice shall have the same effect as if delivered directly by the party hereto.
23.Governing Law. This Agreement shall be construed, and the terms hereof shall be enforceable, in accordance with the internal laws (as distinguished from the conflicts of law provisions) of the state where the Real Property is located, and in the event any legal proceedings are brought in connection with this Agreement, the parties agree that the venue therefore shall be only state and federal courts located in the state where the Real Property is located, and the courts to which an appeal therefrom may be taken.
24.Expenses of Enforcement. In the event of litigation between the parties with respect to the Property, this Agreement, the performance of their obligations hereunder or the effect of a termination under this Agreement, the losing party shall pay all costs and expenses incurred by the prevailing party in connection with such litigation, including reasonable attorneys’ fees.
25.Amendments. Neither this Agreement nor any provisions hereof may be waived, modified, amended, discharged or terminated except by an instrument in writing signed by the party against which the enforcement of such waiver, modification, amendment, discharge or termination is sought, and then only to the extent set forth in such instrument.
26.Non-Business Days. If any date herein set forth for the performance of any obligations by Seller or Purchaser or for the delivery of any instrument or Notice or for the satisfaction of any condition precedent, as herein provided should be on a Saturday, Sunday or legal holiday, the compliance with such obligations or delivery or satisfaction of such condition shall be extended to the next business day following such Saturday, Sunday or legal holiday. As used herein, the term “legal holiday” means any state or federal holiday for which financial institutions or post offices are generally closed in the State of Illinois for observance thereof.
27.Construction of Agreement; Entire Agreement. Time is of the essence in the performance of this Agreement. This Agreement shall not be construed more strictly against one party than against the other merely because of the fact that it may have been prepared by counsel for one of the parties, it being recognized that both Seller and Purchaser have contributed substantially and materially to the preparation of this Agreement. The headings of various paragraphs in this Agreement are for convenience only, and are not to be utilized in construing the content or meaning of the substantive provisions hereof. This Agreement supersedes all
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previous agreements between Seller and Purchaser pertaining to the Property, and this Agreement therefore constitutes the entire agreement and understanding of the parties hereto.
28.Termination of Agreement Prior to Closing. The obligations of Purchaser under clauses (a) and (b) of Paragraph 5 hereof and under Paragraph 19 hereof shall survive, and be enforceable after, a termination by Purchaser of this by Agreement prior to Closing.
29.Survival of Certain Provisions. The provisions of this Agreement, which by their nature are intended to be performed or be applicable after the Closing, shall not merge in the deed of conveyance and shall survive the Closing (but only for the duration specified in Paragraph 7 with respect to the matters specified therein), and all other provisions of this Agreement shall have no further force or effect after the Closing.
30.Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
31.Tax-Deferred Exchange. If Seller or Purchaser desires to structure the applicable transaction to effect a tax-deferred exchange under Section 1031 of the United States Internal Revenue Code and the regulations promulgated thereunder, as amended, then the other party shall cooperate with the structuring party in such effort provided (a) the structuring party pays all reasonable third party, out-of-pocket costs and expenses incurred by the other party in connection therewith, and (b) no other party incurs any potential liabilities as a result thereof that would not otherwise have been incurred by the other party (e.g., by having to make any warranties under a deed).
32.Exclusivity. From and after the Effective Date and continuing until this Agreement is terminated (for any reason), Seller will (a) cease any pending efforts to market the Property for sale, (b) not initiate any new efforts to market the Property for sale, and (c) not make or accept any offer to sell the Property.
33.Waiver of Trial by Jury. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH OF SELLER AND PURCHASER (A) AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS AGREEMENT OR ANY DOCUMENT DELIVERED IN CONNECTION HEREWITH OR THE RELATIONSHIP BETWEEN THE PARTIES AS SELLER AND PURCHASER THAT IS TRIABLE OF RIGHT BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY SELLER AND PURCHASER, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.
34.Definitions. For all purposes of this Agreement, except as otherwise expressly required or unless the context clearly indicates a contrary intent:
(a)“Agreement” means this Purchase and Sale Agreement between Seller and Purchaser;
(b)“Appurtenances” means, collectively, all privileges, rights, easements, hereditaments, and appurtenances belonging to or for the benefit of the Land, including, but not limited to, any streets, alleys, passages, and other rights-of-way included thereon or adjacent thereto (before or after the vacation thereof) and vaults beneath any such streets;
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(c)“Assignment and Assumption Agreement” means an assignment and assumption agreement between Seller and Purchaser, under which Seller assigns to Purchaser all of its rights under the Licenses, Service Contracts and Warranties and Purchaser assumes all obligations of Seller under the Licenses, Service Contracts and Warranties from and after the Closing Date;
(d)“Building” means those buildings constructed on the Land containing approximately 202,000 square feet of rentable space in the aggregate;
(e)“Closing” means the consummation of the purchase and sale of the Property on the terms set forth in this Agreement;
(f)“Closing Date” means March 27, 2026;
(g)“Diligence Date” means March 27, 2026;
(h)“Earnest Money” means Two Hundred Fifty Thousand and No/100 U.S. Dollars ($250,000.00);
(i)“Effective Date” means March 27, 2026;
(j)“Environment” means soil, land surface or subsurface strata, surface waters (including navigable waters, ocean waters, streams, ponds, drainage basins, and wetlands), groundwaters, drinking water supply, stream sediments, ambient air (including indoor air), plant and animal life, and any other environmental medium or natural resource;
(k)“Environmental Law” means any federal, state, local, municipal, foreign, international, multinational, or other administrative order, constitution, law, ordinance, principle or common law, regulation, statute, or treaty, that requires or relates to: (i) advising any and all appropriate governmental bodies, employees, and the public of intended or actual spilling, leaking, emitting, discharging, depositing, escaping, leaching, dumping, or other releasing into the Environment of pollutants or hazardous substances or materials, violations of discharge limits, or other prohibitions and of the commencements of activities, such as resource extraction or construction, that could have significant adverse impact on the Environment; (ii) preventing or reducing to acceptable levels the release of pollutants or hazardous substances or materials into the Environment; (iii) reducing the quantities, preventing the release, or minimizing the hazardous characteristics of wastes that are generated; (iv) protecting resources, species, or ecological amenities; (v) reducing to acceptable levels the risks inherent in the transportation of hazardous substances, pollutants, oil, or other potentially harmful substances; (vi) cleaning up pollutants that have been released, preventing the threat of unlawful release, or paying the costs of such clean up or prevention; or (vii) making responsible parties pay private parties, or groups of them, for damages done to their health or the Environment, or permitting self-appointed representatives of the public interest to recover for injuries done to public assets;
(l)“Escrow” means the escrow established with Escrowee pursuant to the Escrow Agreement;
(m)“Escrow Agreement” means Escrowee’s standard form of Strict Joint Order Escrow Agreement, as amended to permit Purchaser to unilaterally terminate such Escrow Agreement on or prior to the Diligence Date or as otherwise permitted in accordance with this Agreement;
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(n)“Escrowee” means First American Title Insurance Company, at its office located at 30 N. LaSalle Street, Chicago, Illinois 60602, attention John Beckstedt;
(o)“Exhibits” means, collectively, the exhibits attached to this Agreement;
(p)“Hazardous Material” means any waste or other substance that is listed, defined, designated, or classified as, or otherwise determined to be, hazardous, radioactive, or toxic or a pollutant or a contaminant under or pursuant to any Environmental Law, including any admixture or solution thereof, and specifically including petroleum and all derivatives thereof or synthetic substitutes therefore and asbestos or asbestos-containing materials;
(q)“Improvements” means, collectively, the Building and all other improvements located on the Land, or fixtures thereto (including all replacements or additions thereto between the Effective Date and the Closing Date) such as, but not limited to, all systems, facilities, fixtures, equipment and conduits to provide fire protection, security, heat, exhaust, ventilation, air conditioning, electrical power, lighting, plumbing, refrigeration, gas, sewer, water, telephone, and television reception thereto, elevators, canopies, and signs;
(r)“Insurable Easement” means each recorded easement for the benefit of the Land;
(s)“Insured Exception” means any Title Matter or Survey Matter which the Title Insurer is willing to insure over on terms acceptable to Seller and Purchaser;
(t)“Land” means the fee simple estate in that certain improved parcel of land described on Exhibit A, and commonly known as 200 National Drive, Vonore, Tennessee;
(u)“Lease” means that certain Lease Agreement dated as of the Closing Date, between Purchaser, as landlord, and Tenant, as tenant, in the form attached hereto as Exhibit C;
(v)“Licenses” means, collectively, Seller’s interest, if any, in all of the licenses, certifications, authorizations, approvals and permits issued or approved by any governmental authority and relating to the operation, ownership, use and maintenance of the Property or any part thereof, such as, but not limited to, elevator permits, machinery permits, business licenses, ingress and egress, canopy, sign, and driveway curbcut permits;
(w)“Notice” means each notice, request, demand, approval, consent, election, or other communication permitted or required to be given under this Agreement;
(x)“Permitted Title Exceptions” means, collectively, all title exceptions disclosed in Schedule B-2 to the Title Commitment, other than (i) standard exceptions and (ii) those which Seller agrees to cause or is obligated to cause to be discharged, waived, or cured or to be Insured Exceptions at or prior to Closing in accordance with this Agreement;
(y)“Price” means Sixteen Million and No/100 U.S. Dollars ($16,000,000.00);
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(z)“Property” means, collectively, all right, title and interest of Seller in and to (i) the Real Property, (ii) the Appurtenances, (iii) the Licenses, (iv) the Warranties, (v) the Service Contracts, if so elected by Purchaser in accordance herewith, and (vi) the Property Documents;
(aa)“Property Consultants” means, collectively, Purchaser and Purchaser’s designated representatives, agents, employees, contractors, architects, engineers, and environmental specialists;
(ab)“Property Documents” means, collectively, the documents described in Exhibit B, attached hereto and made a part hereof, to the extent the same are in Seller’s possession and control or reasonably available to Seller from its affiliates, representatives, agents or contractors and which Seller shall deliver to Purchaser within five (5) days following the Effective Date;
(ac)“Purchaser’s Costs” means the actual, third-party documented out-of-pocket expenses incurred by Purchaser in connection with, and after entering into this Agreement, making and causing to be made evaluations and investigations of the Property, and arranging financing to consummate the purchase of the Property (including, but not limited to, non-refundable loan commitment fees and other borrowing costs);
(ad)“Purchaser’s Grantee” means any entity which is controlled by, under common ownership with or otherwise affiliated with Purchaser or has been designated to hold title to the Property for the direct or indirect benefit of Purchaser;
(ae)“Real Property” means, collectively, the Land, the Improvements and the Appurtenances;
(af)“Seller’s Broker” means Colliers;
(ag)“Service Contracts” means, collectively, all service, maintenance, operating, repair, advertising and other contracts relating to the Real Property, if any, to which Seller is a party, excluding the Lease;
(ah)“Survey” means a plat of survey of the Real Property, made after the date hereof and so certified and bearing a certificate by a licensed land surveyor, naming Purchaser, Purchaser’s lender and the Title Insurer as parties to whom it is addressed, signed and sealed by said surveyor, that (i) said plats and surveys on which they are based were made in accordance with “Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys,” jointly established and adopted by ALTA and NSPS in 2021, and includes Items 1-4, 6(a), 6(b), 7(a), 7(b)(1), 7(c), 8-10, 13, 16-19 of Table A thereof and (ii) said plats reflect the locations of all building lines, easements and areas affected by any recorded documents affecting the Property, as disclosed in the Title Commitment (identified by issuer, commitment number, and an effective date after the date hereof);
(ai)“Survey Matter” means a matter which is disclosed in the Survey and to which Purchaser specifically objects by Notice to Seller;
(aj)“Tangible Personal Property” means, collectively, all machinery, equipment, furnishings, signs and other tangible personal property, if any, situated in or upon or used solely in connection with the operation or maintenance of the Real Property and owned by Seller;
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(ak)“Tenant” means COMMERCIAL VEHICLE GROUP, INC., a Delaware corporation;
(al)“Title Commitment” means a commitment dated after the Effective Date for an extended coverage owner’s policy of title insurance (ALTA Form 2021), together with such endorsements thereto as are reasonably requested by Purchaser and available in the state where the Real Property is located, in the amount of the Price, naming Purchaser as the proposed insured and covering the title to the Real Property and each of the Appurtenances, if any, comprising an Insurable Easement;
(am)“Title Matter” means a matter which is disclosed in the Title Commitment and to which Purchaser specifically objects by Notice to Seller;
(an)“Title Insurer” shall means First American Title Insurance Company;
(ao)“Title Policy” means collectively, the owner’s and loan policies of title insurance issued pursuant to the Title Commitment;
(ap)“Warranties” means, collectively, Seller’s interest, if any, in all of the guarantees, warranties and bonds in effect with respect to the Real Property or any portion thereof.
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IN WITNESS WHEREOF, Purchaser and Seller have executed this Agreement as of the Effective Date.
PURCHASER:
BIG ACQUISITIONS LLC,
an Illinois limited liability company
By: _/s/ Michael Brennan_______
Name: __Michael Brennan_________
Its: ___Manager_______________
SELLER:
CVG NATIONAL SEATING COMPANY, LLC,
a Delaware limited liability company
By: Commercial Vehicle Group, Inc., a Delaware corporation
Its: Sole Member
By: _/s/ Aneezal Mohamed_______
Name: Aneezal H. Mohamed
Its: Secretary
Tenant has executed this Agreement as of the Effective Date for the limited purpose of indemnifying Purchaser pursuant to Section 7 of this Agreement.
TENANT:
COMMERCIAL VEHICLE GROUP, INC.,
a Delaware corporation
By: __/s/ Aneezal Mohamed_______
Name: Aneezal H. Mohamed
Its: Secretary
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EXHIBIT A
Description of the Land
Description of the Land
The Land referred to herein below in situated in the County of Monroe, State of Tennessee, and described as follows:
Situated in the Second Civil District of Monroe County, Tennessee, and described as follows:
To find the Point of Beginning, begin at a point in the 820.0 contour of Tellico Lake, said point being in the North line of the East Tennessee Natural Gas Easement, said point also being the Southeast corner of the property now or formerly owned by Sea-Ray Boats, Inc., thence from said point and along the 820.0 contour line South 34 degrees 57 minutes 45 seconds east, a distance of 60.71 feet to a point marked by an iron pin, said point being the Point of Beginning; thence from said Point of Beginning along the Northeastern line of the said Tellico Reservoir Development Agency property also being along the 820.0 contour line, the following courses and distances:
South 34 degrees 57 minutes 45 seconds East, 64.97 feet to a point marked by an iron pin; thence South 11 degrees 19 minutes 47 seconds East, 118.32 feet to a point marked by an iron pin;
thence South 76 degrees 10 minutes 16 seconds East, 78.20 feet to a point marked by an iron pin; thence North 72 degrees 25 minutes 58 seconds East, 72.83 feet to a point marked by an iron pin; thence South 70 degrees 44 minutes 41 seconds East, 43.88 feet to a point marked by an iron pin; thence North 85 degrees 39 minutes 49 seconds East, 80.43 feet to a point marked by an iron pin; thence North 36 degrees 18 minutes 22 seconds East, 49.23 feet to a point marked by an iron pin; thence North 57 degrees 27 minutes 54 seconds East 128.43 feet to a point marked by an iron pin; thence North 82 degrees 00 minutes 32 seconds East, 160.20 feet to a point marked by an iron pin; and thence South 77 degrees 40 minutes 48 seconds East 81.81 feet to a point marked by an iron pin, and being the Southeast corner of the Tellico Reservoir Development Agency property;
thence from said Southeast corner and along the Southern line of the said Tellico Reservoir Development Agency property and the 820.0 contour line the following courses and distances: South 0 degrees 07 minutes 28 seconds East, 72.80 feet to a point marked by an iron pin;
thence South 19 degrees 54 minutes 57 seconds West, 190.36 feet to a point marked by an iron pin; thence South 23 degrees 38 minutes 02 seconds West 203.94 feet to a point marked by an iron pin; thence South 38 degrees 38 minutes 21 seconds West 182.79 feet to a point marked by an iron pin; thence South 49 degrees 56 minutes 07 seconds West 221.72 feet to a point marked by an iron pin; thence South 53 degrees 09 minutes 23 seconds West 236.11 feet to a point marked by an iron pin; thence South 38 degrees 42 minutes 24 seconds West 142.89 feet to a point marked by an iron pin; thence South 33 degrees 13 minutes 50 seconds West 446.06 feet to a point marked by an iron pin; thence South 14 degrees 27 minutes 33 seconds West 145.98 feet to a point marked by an iron pin; thence South 44 degrees 51 minutes 06 seconds West 216.26 feet to a point marked by an iron pin; thence South 16 degrees 06 minutes 24 seconds West 159.03 feet to a point marked by an iron pin; thence South 81 degrees 13 minutes 04 seconds West 234.95 feet to a point marked by an iron pin; thence South 52 degrees 42 minutes 10 seconds West 100.37 feet to a point marked by an iron pin; thence South 16 degrees 18 minutes
28302917.3
37 seconds West 204.68 feet to a point, said point being marked by an iron pin and being the Southwest corner of the said Tellico Reservoir development Agency property; thence in a Northwestward direction and leaving the 820.0 contour line, North 40 degrees, 51 minutes 46 seconds West a distance of 1001.72 feet to an iron pin, said iron pin being Northwest corner of the said Tellico Reservoir Development agency property, and being in the South line of the East Tennessee Natural Gas Company right of way;
thence along said right of way of East Tennessee Natural gas Company Easement, the following courses and distances:
North 49 degrees 08 minutes 14 seconds East 1288.63 feet to a point marked by an iron pin;
thence North 48 degrees 50 minutes 50 seconds East, 292.43 feet to a point marked by an iron pin;
thence North 47 degrees 39 minutes 20 seconds East, 303.38 feet to a point marked by an iron pin; thence North 33 degrees 42 minutes 39 seconds East, 126.63 feet to a point marked by an iron pin; thence North 20 degrees 28 minutes 57 seconds East, 52.18 feet to the Point of Beginning.
Being the same property conveyed to National Seating Company, a Delaware corporation by Deed from American Transit Corp., a Missouri corporation, of record in Deed Book 192, Page 509, in the Register’s Office of Monroe County, Tennessee. National Seating Company, a Delaware corporation having since converted to CVG National Seating Company, LLC, a Delaware limited liability company, as evidenced by Certificate of Conversion in Book M265, Page 329, said Register’s Office.
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EXHIBIT B
Schedule of Property Documents
Schedule of Property Documents
1.A copy of the certificate of occupancy for the Building and all other permits related thereto.
2.Copies of any notices received in connection with any purported or actual violation at the Property of any applicable law.
3.Copies of all reports (listed below) relating to the Property (the “Reports”); it being understood and agreed by the parties hereto that Seller is in no way warranting or representing, express or implied, the accuracy or completeness of anything contained in the Reports and that Purchaser is not entitled to rely on the Reports:
A.Engineering;
B.Geotechnical;
C.Environmental;
D.ALTA survey;
E.Zoning; and
F.As-built plans and specifications for the Building.
4.Copies of the Seller’s title policies, including copies of all endorsements thereto and all documents referenced in the policies and endorsements, and the legal description of the Property.
5.Copies of any easement and reciprocal easement agreements.
6.Copies of agreements with any governmental agencies relating to the development, construction, ownership or operation of the Property.
7.A current year operating budget for the Property.
8.A report of material maintenance and capital improvements conducted by Seller at the Property during Seller’s ownership of the Property and of any material maintenance and capital improvements budgeted for the year in which Closing occurs.
9.The following information relating to Seller’s ownership and operation of the Property:
A.copies of quarterly operating statements for the year to date and the prior three (3) calendar years, including property revenue and expense reports
28302917.3
and any other financial information relevant to the operation of the Property during such period;
B.copies of all tax bills and statements for the Property for the prior tax year and the current tax year;
C.copies of any notices of actual or proposed reassessments of the Property;
D.insurance claims and notifications.
10.Copies of all Licenses, Warranties and Service Contracts.
11.A copy of all leasing agreements relating to the Property.
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EXHIBIT C
Lease
Lease
(attached hereto)
28302917.3
Exhibit 10.2
200 National Drive, Vonore, Tennessee
LEASE AGREEMENT
BETWEEN
200 NATIONAL LLC,
an Illinois limited liability company
an Illinois limited liability company
as Landlord
AND
COMMERCIAL VEHICLE GROUP, INC.,
a Delaware corporation
a Delaware corporation
as Tenant
LEASE AGREEMENT
THIS LEASE AGREEMENT (this “Lease”) dated as of March 27, 2026 (the “Commencement Date”) is made and entered into between 200 NATIONAL LLC, an Illinois limited liability company (“Landlord”), and COMMERCIAL VEHICLE GROUP, INC., a Delaware corporation (“Tenant”).
ARTICLE I
Section 1.01 Lease of Premises; Title and Condition. Upon and subject to the terms and conditions herein specified, Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the premises (the “Premises”) consisting of the following:
(a) those parcels of land more particularly described in Exhibit A attached hereto and made a part hereof for all purposes having the following address: 200 National Drive, Vonore, Tennessee, together with all of Landlord’s right, title and interest, if any, in and to all easements, rights-of-way, appurtenances and other rights and benefits associated with such parcel(s) of land and to all public or private streets, roads, avenues, alleys or pass ways, open or proposed, on or abutting such parcel(s) of land (collectively, the “Land”); and
(b) all of the buildings, structures, fixtures, facilities, installations and other improvements of every kind and description now or hereafter in, on, over and under the Land and all plumbing, gas, electrical, ventilating, lighting and other utility systems, ducts, hot water heaters, oil burners, domestic water systems, elevators, escalators, canopies, air conditioning systems and all other building systems and fixtures attached to or comprising a part of the buildings, including all other building systems and fixtures necessary to the ownership, use, operation, repair and maintenance of the buildings, structures, fixtures, facilities, installations and other improvements of every kind, but excluding all Severable Property (as defined in Section 3.01 hereof) (collectively, the “Improvements”).
Tenant acknowledges that simultaneously herewith, Tenant has conveyed the Premises to Landlord. Accordingly, notwithstanding any provision of this Lease to the contrary, the Premises are leased to Tenant in their present condition without representation or warranty by Landlord and subject to the rights of parties in possession, to the existing state of title, to all applicable Legal Requirements (as defined in Section 5.02(b)) now or hereafter in effect and made a part hereof (collectively, “Permitted Exceptions”) for all purposes. Tenant has examined the Premises and title to the Premises and has found all of the same satisfactory for all purposes. LANDLORD LEASES AND WILL LEASE AND TENANT TAKES AND WILL TAKE THE PREMISES “AS IS”, “WHERE-IS” AND “WITH ALL FAULTS”. TENANT ACKNOWLEDGES THAT LANDLORD (WHETHER ACTING AS LANDLORD HEREUNDER OR IN ANY OTHER CAPACITY) HAS NOT MADE NOR SHALL LANDLORD BE DEEMED TO HAVE MADE, ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE PREMISES, INCLUDING ANY WARRANTY OR REPRESENTATION AS TO (i) ITS FITNESS, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE, (ii) THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, (iii) THE EXISTENCE OF ANY DEFECT, LATENT OR PATENT, (iv) LANDLORD’S TITLE THERETO, (v) VALUE, (vi) COMPLIANCE WITH SPECIFICATIONS, (vii) LOCATION, (viii) USE, (ix) CONDITION, (x) MERCHANTABILITY, (xi) QUALITY, (xii) DESCRIPTION, (xiii) DURABILITY, (xiv) OPERATION, (xv) THE EXISTENCE OF ANY HAZARDOUS SUBSTANCE, HAZARDOUS
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CONDITION OR HAZARDOUS ACTIVITY OR (xvi) COMPLIANCE OF THE PREMISES WITH ANY LAW; AND ALL RISKS INCIDENT THERETO ARE TO BE BORNE BY TENANT. TENANT ACKNOWLEDGES THAT AS LANDLORD’S IMMEDIATE PREDECESSOR IN TITLE, THE PREMISES ARE OF TENANT’S SELECTION AND TO ITS SPECIFICATIONS AND THAT THE PREMISES HAVE BEEN INSPECTED BY TENANT AND ARE SATISFACTORY TO TENANT. IN THE EVENT OF ANY DEFECT OR DEFICIENCY IN ANY OF THE PREMISES OF ANY NATURE, WHETHER LATENT OR PATENT, LANDLORD SHALL NOT HAVE ANY RESPONSIBILITY OR LIABILITY WITH RESPECT THERETO OR FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING STRICT LIABILITY IN TORT). The provisions of this paragraph have been negotiated and are intended to be a complete exclusion and negation of any warranty by Landlord, express or implied, with respect to any of the Premises, arising pursuant to the Uniform Commercial Code or any other law now or hereafter in effect or arising otherwise.
Section 1.02 Use. Except as expressly set forth in the following sentence, Tenant may use the Premises for industrial purposes consistent with Tenant’s ordinary course of business as of the Commencement Date, to the extent allowed under current zoning requirements and for no other purpose. Tenant shall not use or occupy or permit any of the Premises to be used or occupied, nor do or permit anything to be done in or on any of the Premises, in a manner which would reasonably foreseeably (i) make void or voidable or cause any insurer to cancel any insurance required by this Lease, or make it difficult or impossible to obtain any such insurance at commercially reasonable rates, (ii) make void or voidable, cancel or cause to be canceled or release any warranty, guaranty or indemnity running to the benefit of the Premises or Landlord, (iii) cause structural injury to any of the Improvements, (iv) constitute a public or private nuisance or waste, or (v) violate any Legal Requirements (as defined below). Notwithstanding any provision hereof to the contrary, in no event shall Tenant or any Transferee, whether consented to by Landlord or otherwise, be permitted to change the use of the Premises without Landlord’s prior written consent, which may be withheld or granted in its sole and absolute discretion.
Section 1.03 Term. This Lease shall begin on the Commencement Date and shall end on the last day of the 240th full calendar month following the Commencement Date. The time period during which this Lease shall actually be in effect, as the same may be terminated prior to its scheduled expiration pursuant to the provisions hereof, is referred to herein as the “Term”.
Section 1.04 Right of Renewal.
(a) Right of Renewal. Tenant shall have the right to renew the Term for all of the Premises for two (2) renewal terms of ten (10) years (each, a “Renewal Term”), each of which shall commence on the day following the expiration of the Term, as previously extended and end on the tenth (10th) anniversary of the last day of the Term, unless such Renewal Term shall sooner terminate pursuant to any of the terms of this Lease or otherwise. Each Renewal Term shall commence only if (1) Tenant shall have notified Landlord in writing of Tenant’s exercise of such renewal right not later than nine (9) months prior to the then last day of the Term and (2) at the time of the exercise of such right and immediately prior to the then last day of the Term, no Event of Default shall have occurred and be continuing hereunder. Time is of the essence with respect to the giving of the notice of Tenant’s exercise of each renewal option, and Tenant’s failure to timely give notice of Tenant’s exercise of a renewal option shall render null and void the subject renewal option and any subsequent renewal options hereunder. Each Renewal Term shall be upon all of the agreements, terms,
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covenants and conditions hereof binding upon Tenant, except that Base Rent payable during the first year of each Renewal Term shall increase to the then Fair Market Rate, which increase shall be applied on the first (1st) day of each Renewal Term, and Tenant shall have no further right to renew the Term beyond the second (2nd) Renewal Term. After the first year of each Renewal Term, Base Rent shall increase three and one-half percent (3.50%) annually beginning with the first day of the second year of each Renewal Term. Upon the commencement of each Renewal Term, (1) such Renewal Term shall be added to and become part of the Term and (2) any reference to “this Lease”, to the “Term”, the “term of this Lease” or any similar expression shall be deemed to include such Renewal Term.
(b) Fair Market Rate. As used herein, “Fair Market Rate” shall mean the fair market rental value as reasonably determined by Landlord. If Tenant shall dispute Landlord’s determination of Fair Market Rate, Tenant shall give notice to Landlord of such dispute within five (5) days of Tenant’s receipt of Landlord’s determination, and such dispute shall be determined by a single arbitrator appointed in accordance with the American Arbitration Association Real Estate Valuation Arbitration Proceeding Rules. Landlord and Tenant shall each bear one-half of the cost of such arbitrator. The arbitrator shall be impartial and shall have not less than ten (10) years’ experience in the county where the Property is located, which experience shall be related to the leasing of industrial space in buildings comparable to the Improvements, and the fees of the arbitrator shall be shared by Landlord and Tenant. Within five (5) days following the appointment of the arbitrator, Landlord and Tenant shall attend a hearing before the arbitrator at which each party shall submit a report setting forth its determination of the fair market rental value of the Premises for the Renewal Term, together with such information on comparable rentals and such other evidence as such party shall deem relevant. The arbitrator shall, within ten (10) days following such hearing and submission of evidence, render his or her decision by selecting the determination of fair market rental value submitted by either Landlord or Tenant which, in the judgment of the arbitrator, most nearly reflects the fair market rental value of the Premises for the applicable Renewal Term. The arbitrator shall have no power or authority to select any fair market rental value other than a fair market rental value submitted by Landlord or Tenant, and the decision of the arbitrator shall be final and binding upon Landlord and Tenant.
(c) Minimum Fair Market Value. Notwithstanding anything herein to the contrary, including any determination by an arbitrator pursuant to Section 1.04(b), in no event shall the fair market rental value be less than the Base Rent payable in any prior year of the Term, as the Term may have been extended herein.
Section 1.05 Rent. In consideration of this Lease, during the Term, Tenant shall pay to Landlord the amounts set forth in Exhibit B as annual basic rent for the Premises (“Basic Rent”). Tenant shall pay Basic Rent and all other sums payable to Landlord hereunder to Landlord (or, upon Landlord’s request, to any Mortgagee (as hereinafter defined) under any mortgages, deeds of trust or similar security instruments creating a lien on the interest of Landlord in the Premises (whether one or more, the “Mortgage”)) by wire transfer, in immediately available funds, as follows:
Bank Name: CIBC Bank
Bank Address: 120 S LaSalle St, Chicago, IL 60603
ABA/Routing Number: 071006486
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or at such other address or to such other Person as Landlord from time to time may designate. Landlord shall give Tenant not less than fifteen (15) days prior written notice of any change in the address to which such payments are to be made. If the party entitled to receive Basic Rent or such party’s address shall change, Tenant may, until receipt of notice of such change from the party entitled to receive Basic Rent or other sums payable hereunder immediately preceding such change, continue to pay Basic Rent and other sums payable hereunder to the party to which, and in the manner in which, the preceding installment of Basic Rent or other sums payable hereunder, as the case may be, was paid. Such Basic Rent shall be paid in equal monthly installments in advance on the first day of each month, except for any Basic Rent due for the rental of the Premises during the period from the Commencement Date through the end of the calendar month in which the Commencement Date occurs, which shall be payable in advance on or before the Commencement Date. Any rental payment made in respect of a period which is less than one month shall be prorated by multiplying the then applicable monthly Basic Rent by a fraction the numerator of which is the number of days in such month with respect to which rent is being paid and the denominator of which is the total number of days in such month. Tenant shall perform all its obligations under this Lease at its sole cost and expense, and shall pay all Basic Rent, and other sums payable hereunder when due and payable, without notice, demand, abatement, deduction or set off.
ARTICLE II
Section 2.01 Maintenance and Repair. Tenant, at its own expense, will maintain all parts of the Premises in good repair, appearance and condition in accordance with all Legal Requirements and will take all commercially reasonable action and will make all commercially reasonable structural and nonstructural, foreseen and unforeseen and ordinary and extraordinary changes and repairs which may be required to keep all parts of the Premises in good repair and condition (including all painting, glass, utilities, conduits, fixtures and equipment, foundation, roof, exterior walls, heating and air conditioning systems, wiring, plumbing, sprinkler systems and other utilities, and all paving, sidewalks, roads, parking areas, curbs and gutters and fences). Tenant, at its own expense, will retain an independent consultant reasonably approved by Landlord to conduct annual inspections of the roof and the heating and air conditioning systems of the Premises and to provide Tenant and Landlord with a written report of its findings. Tenant shall promptly cause a licensed contractor to perform any recommended or necessary repairs or maintenance measures reflected in such report. Landlord, its contractors, subcontractors, servants, employees and agents, shall have the right to enter upon the Premises with three (3) business days prior notice (except in the event of an emergency, in which case no notice shall be required) to inspect same to ensure that all parts of the Premises are maintained in good repair and condition, and Tenant shall not be entitled to any abatement or reduction in rent by reason thereof. Landlord shall not be required to maintain, repair or rebuild all or any part of the Premises. Tenant waives the right to require Landlord to maintain, repair or rebuild all or any part of the Premises or make repairs at the expense of Landlord pursuant to any Legal Requirements, agreement, contract, covenant, condition or restrictions at any time.
Section 2.02 Alterations, Replacements and Additions. Tenant may, at its expense, make additions to and alterations of the Improvements, and construct additional Improvements, provided that (i) the fair market value, the utility, the square footage or the useful life of the Premises shall not be materially lessened thereby, (ii) such work shall be expeditiously completed in a good and workmanlike manner and in compliance with all applicable Legal Requirements and the requirements of all insurance policies required to be maintained by Tenant hereunder, (iii) no material
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structural alterations shall be made to the Improvements or additional structure improvements constructed or structural demolitions conducted in connection therewith unless Tenant shall have obtained Landlord’s consent (including Landlord’s approval of the plans and specifications therefor) and furnished Landlord with such surety bonds or other security acceptable to Landlord as shall be reasonably acceptable to Landlord (but in no event greater than the cost of such alterations or demolitions), (iv) no additions, replacements or alterations (other than cosmetic, interior or nonstructural alterations) which cost $100,000 or more per single addition, replacement or alteration, or $250,000 or more in the aggregate of all such additions, replacements or alterations shall be made unless prior written consent from Landlord shall have been obtained (including Landlord’s approval of the plans and specifications therefor), and (v) no Event of Default exists. Cosmetic, interior or nonstructural alterations (including demolition or construction of interior demising walls that are non-structural and non-load bearing) that cost less than $100,000 per single addition, replacement or alteration, or $250,000 in the aggregate of any other such additions, replacements or alterations, shall not require prior written consent from Landlord . All additions and alterations of the Premises, without consideration by Landlord, shall be and remain part of the Premises (not subject to removal upon termination) and the property of Landlord and shall be subject to this Lease.
ARTICLE III
Section 3.01 Severable Property. Tenant may, at its expense, install, assemble or place on the Premises and remove and substitute any severable property used or useful in Tenant’s business, all as more particularly described in Exhibit C attached hereto and made a part hereof for all purposes (collectively, the “Severable Property”).
Section 3.02 Removal. Any of Tenant’s Severable Property not removed by Tenant prior to the expiration of this Lease or thirty (30) days after an earlier termination shall be considered abandoned by Tenant and may be appropriated, sold, destroyed or otherwise disposed of by Landlord without obligation to account therefor. Tenant will repair at its expense all damage to the Premises necessarily caused by the removal of Tenant’s Severable Property, whether effected by Tenant or by Landlord.
ARTICLE IV
Section 4.01 Tenant’s Assignment and Subletting. Tenant shall not, whether for its own account or otherwise, assign this Lease or sublet or grant concessions or licenses or other rights for the occupancy or the use of all or any part of the Premises (each, a “Transfer”) for the Term of this Lease without Landlord’s prior written consent to such Transfer, which may be withheld or granted at Landlord’s sole and absolute discretion, except as otherwise expressly set forth in this Lease. Any transfer of all or substantially all of the assets of Tenant or all or more than 49% of the stock or other direct or indirect ownership interests in Tenant (whether in one or a series of transactions), any merger of Tenant into another entity or of another entity into Tenant, or any transfer occurring by operation of law, shall be deemed to constitute a Transfer by Tenant of its interest hereunder for the purposes hereof. Each such Transfer shall expressly be made subject to the provisions hereof. No such Transfer shall modify or limit any right or power of Landlord hereunder or affect, reduce or relieve Tenant of any duty or obligation of Tenant hereunder, and all such duties and obligations shall be those of Tenant and shall continue in full effect as obligations of Tenant as a principal and not of a guarantor or surety, as though no subletting or assignment had been made, such liability of the Tenant named herein to continue notwithstanding any Transfer and subsequent modifications or amendments of this Lease after such Transfer. Neither this Lease nor the Term hereby demised shall be mortgaged
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or pledged by Tenant, nor shall Tenant mortgage or pledge its interest in any sublease of the Premises or the rentals payable thereunder without Landlord’s prior written consent to such Transfer, which may be withheld or granted at Landlord’s sole and absolute discretion. Any Transfer by Tenant without Landlord’s prior written consent, except as otherwise expressly permitted by this Lease, shall be null and void, ab initio, shall constitute bad faith, and shall constitute an immediate Event of Default hereunder. Tenant shall, within twenty (20) days after the execution of any assignment, sublease or other Transfer document, deliver a conformed copy thereof to Landlord.
Section 4.02 Transfer by Landlord. Landlord shall be free to transfer its interest in the Premises or any part thereof or interest therein, subject, however, to the terms of this Lease. Any such transfer shall relieve the transferor of all liability and obligations hereunder (to the extent of the interest transferred) accruing after the date of the transfer and any Transferee shall deemed to have assumed all obligations of Landlord hereunder arising from and after the date of such transfer and be bound by the terms and provisions of this Lease.
Section 4.03 Assignment/Subletting Exceptions. Notwithstanding the provisions of Section 4.01, Tenant shall have the right to assign its interest in this Lease or sublet all or any portion of the Premises at any time without the consent of Landlord to (i) the surviving entity of any merger or consolidation between Tenant and its parent, (ii) any Affiliate of Tenant, or (iii) to any Person who purchases substantially all of the assets or equity of Tenant (including any merger or other transfer by operation of law), so long as any proposed assignee or subtenant has (A) Operating EBITDA of no less than $16,000,000.00 and (B) Leverage no more than five (5), as shown on such prospective assignee’s or subtenant’s proforma balance sheet prepared in accordance with GAAP anticipated to be reasonably accurate upon such assignment or sublease. For purposes hereof, “Leverage” shall mean, for any period, for such entity and its subsidiaries, determined on a consolidated basis, the quotient obtained by dividing outstanding third-party borrowings (net of cash and cash equivalents) by Operating EBITDA. For purposes hereof, “Operating EBITDA” shall mean, for any period, for such entity and its subsidiaries, determined on a consolidated basis, the sum of (A) net operating earnings before other income or expense, and (B) depreciation and amortization expense, in each case determined in accordance with GAAP. Any assignment or subletting of the Premises by Tenant to which Landlord consents pursuant to the exceptions afforded Tenant above in this Section shall be conditioned on the following:
(a) Tenant is not then in default beyond applicable notice and cure periods hereunder;
(b) Landlord is provided a copy of such assignment or sublease;
(c) Any subletting or assignment of the Premises shall be subject to the terms of this Lease, and Tenant shall remain liable for all duties and obligations of Tenant hereunder, as same may be amended from time to time;
(d) Each sublease permitted under this Section shall contain provisions to the effect that (i) such sublease is only for actual use and occupancy by the subtenant; (ii) such sublease is subject and subordinate to all of the terms, covenants and conditions of this Lease and to all of the rights of Landlord hereunder; (iii) that any security deposit paid by subtenant shall be pledged to Landlord subject to the terms of the sublease and subject to Tenant’s right to apply the security deposit in accordance with the sublease; and (iv) in the event this Lease shall terminate before the expiration of such sublease, the subtenant thereunder will, at Landlord’s option, attorn to Landlord
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and waive any rights the subtenant may have to terminate the sublease or to surrender possession thereunder, as a result of the termination of this Lease;
(e) Tenant agrees to pay, or to cause the assignee or subtenant, as applicable, to pay, on behalf of Landlord any and all reasonable out-of-pocket costs of Landlord, including reasonable attorneys’ fees paid or payable to outside counsel, occasioned by such subletting or assignment. Further, Tenant agrees that Landlord shall not be liable for any leasing commissions, finishout costs, rent abatements or other costs, fees or expenses incurred by Tenant in subleasing or assigning or seeking to sublease or assign its leasehold interest in the Premises, and Tenant agrees to indemnify, defend and hold harmless Landlord and its partners, and their respective officers, directors, shareholders, agents, employees and representatives from, against and with respect to any and all such commissions, costs, fees and expenses;
(f) In the case of an assignment, such assignee agrees in writing to assume, honor and perform all of the obligations of Tenant hereunder, and
(g) No such Transfer shall cause or require the release of any Security Deposit, Letter of Credit or other security held by Landlord as security hereunder; provided, however, that (i) any security deposit, letter of credit or other security held by Tenant as security for any of Tenant’s permitted sublessees shall be held by Tenant in trust for the benefit of Landlord; and (ii) to the extent that the rent or other consideration received by Tenant under and such permitted Transfer exceeds the Basic Rent and other consideration due from Tenant to Landlord under this Lease, then Tenant shall immediately pay to Landlord (in any event on the next date on which Basic Rent is due under this Lease) fifty percent (50%) of such rent or other consideration.
For the purposes of this Lease, “Affiliate” shall be defined as with respect to any Person, any other Person that, directly or indirectly, controls or is controlled by or is under common control with such Person and shall include the spouse of any natural person, with the term “control” and any derivatives thereof meaning the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract, or otherwise; “Person” shall mean an individual, partnership, association, corporation, governmental authority or other entity and “Transferee” shall mean any Person who acquires all or a portion of an interest in this Lease.
ARTICLE V
Section 5.01 Net Lease.
(a) It is expressly understood and agreed by and between the parties that this Lease is an absolute net lease, and the Basic Rent and all other sums payable hereunder to or on behalf of Landlord shall be paid without notice or demand and without setoff, counterclaim, abatement, suspension, deduction or defense.
(b) Except as otherwise expressly provided in this Lease, this Lease shall not terminate, nor shall Tenant have any right to terminate this Lease or be entitled to the abatement of any rent or any reduction thereof, nor shall the obligations hereunder of Tenant be otherwise affected, by reason of any damage to or destruction of all or any part of the Premises from whatever cause, the taking of the Premises or any portion thereof by condemnation or otherwise, the prohibition, limitation or restriction of Tenant’s use of the Premises, any default on the part of Landlord, any
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latent or other defect in any of the Premises, the breach of any warranty of any seller or manufacturer of any of the Improvements or Severable Property, any violation of any provision of this Lease by Landlord, the bankruptcy, insolvency, reorganization, composition, readjustment, liquidation, dissolution or winding-up of, or other proceeding affecting Landlord, the exercise of any remedy, including foreclosure, under any mortgage or collateral assignment, any action with respect to this Lease (including the disaffirmance hereof) which may be taken by Landlord, any trustee, receiver or liquidator of Landlord or any court under the Federal Bankruptcy Code or otherwise, and market or economic changes, or interference with such use by any private Person, or by reason of any eviction by paramount title resulting by a claim from Landlord’s predecessor in title, or for any other cause whether similar or dissimilar to the foregoing, any present or future law to the contrary notwithstanding, it being the intention of the parties hereto that the rent and all other charges payable hereunder to or on behalf of Landlord shall continue to be payable in all events and the obligations of Tenant hereunder shall continue unaffected, unless the requirement to pay or perform the same shall be terminated pursuant to an express provision of this Lease.
(c) The obligations of Tenant hereunder shall be separate and independent covenants and agreements. Tenant covenants and agrees that it will remain obligated under this Lease in accordance with its terms, and that Tenant will not take any action to terminate, rescind or avoid this Lease, notwithstanding the bankruptcy, insolvency, reorganization, composition, readjustment, liquidation, dissolution, winding-up or other proceeding affecting Landlord or any assignee of Landlord in any such proceeding and notwithstanding any action with respect to this Lease which may be taken by any trustee or receiver of Landlord or of any assignee of Landlord in any such proceeding or by any court in any such proceeding.
(d) Except as otherwise expressly provided in this Lease, Tenant waives all rights now or hereafter conferred by law (i) to quit, terminate or surrender this Lease or the Premises or any part thereof or (ii) to any abatement, suspension, deferment or reduction of the rent, or any other sums payable hereunder to or on behalf of Landlord, regardless of whether such rights shall arise from any present or future constitution, statute or rule of law.
Section 5.02 Taxes and Assessments; Compliance with Law.
(a) Tenant shall pay, as additional rent, prior to delinquency, the following (collectively, “Taxes”):
(i) all taxes, assessments, levies, fees, water and sewer rents and charges and all other governmental charges (whether federal, state, county or municipal), general and special, ordinary and extraordinary, foreseen and unforeseen, which are, at any time prior to or during the Term imposed or levied upon or assessed by a taxing or management district or authorities presently existing or hereafter created against or which arise with respect to (A) the Premises, (B) any Basic Rent, additional rent or other sums payable hereunder, (C) this Lease or the leasehold estate hereby created or (D) the operation, possession or use of the Premises;
(ii) all gross receipts or similar taxes (i.e., taxes based upon gross income which fail to take into account deductions with respect to depreciation, interest, taxes or ordinary and necessary business expenses, in each case relating to
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the Premises) imposed or levied upon, assessed against or measured by any Basic Rent, additional rent or other sums payable hereunder;
(iii) all franchise, sales, value added, ad valorem, use and similar taxes at any time levied, assessed or payable on account of the leasing, operation, possession or use of the Premises; and
(iv) all charges of utilities, communications and similar services serving the Premises.
Notwithstanding the foregoing, “Taxes”, as used herein, shall not include, and Tenant shall not be required to pay, any estate, inheritance, transfer, income, capital gains or similar tax of or on Landlord unless such tax is imposed, levied or assessed in substitution for any other tax, assessment, charge or levy which Tenant is required to pay pursuant to this Section 5.02(a); provided, however, that if, at any time during the Term, the method of taxation shall be such that there shall be assessed, levied, charged or imposed on Landlord a capital levy or other tax directly on the rents received therefrom (other than income tax), or upon the value of the Premises or any present or future improvement or improvements on the Premises, then all such levies and taxes or the part thereof so measured or based shall be included in the term “Taxes” and payable by Tenant, and Tenant shall pay and discharge the same as herein provided. Tenant will furnish to Landlord, promptly after request therefor, proof of payment of all items referred to above which are payable by Tenant. If any such assessment may legally be paid in installments, Tenant may pay such assessment in installments; in such event, Tenant shall be liable only for installments which become due and payable with respect to any tax period occurring in whole or in part during the Term hereof; provided, however, that all amounts referred to in this Section 5.02(a) for the fiscal or tax year in which the Term shall expire shall be apportioned so that Tenant shall pay those portions thereof which correspond with the portion of such year as are within the Term hereby demised.
(b) Tenant shall comply with and cause the Premises to comply with and shall assume all obligations and liabilities with respect to the following:
(i) all laws, ordinances and regulations and other governmental rules, orders and determinations presently in effect or hereafter enacted, made or issued, whether or not presently contemplated (collectively, “Legal Requirements”), as applied to the Premises or the ownership, operation, use or possession thereof, including maintaining an adequate number of vehicular parking spaces, and
(ii) all contracts, insurance policies (including to the extent necessary to prevent cancellation thereof and to insure full payment of any claims made under such policies), agreements, covenants, conditions and restrictions now or hereafter applicable to the Premises or the ownership, operation, use or possession thereof (other than covenants, conditions and restrictions imposed by Landlord subsequent to the date of this Lease without the consent of Tenant, not to be unreasonably withheld, conditioned or delayed), including all such Legal Requirements, contracts, agreements, covenants, conditions and restrictions which require structural, unforeseen or extraordinary changes; provided, however, that, with respect to any of the obligations of Tenant in clause (ii) above which are not now in existence, Tenant shall not be required to so comply unless Tenant is either a party thereto or has given its written consent thereto, or unless the same is occasioned by Legal Requirements
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or Tenant’s default (including any failure or omission by Tenant) under this Lease. Nothing in clause (ii) of the immediately preceding sentence or the following sentence shall modify the obligations of Tenant under Section 5.04 of this Lease.
(c) On the date hereof and promptly after any future date on which the Taxes are increased by an applicable taxing authority, Tenant shall pay to Landlord that amount necessary to ensure there will be on deposit with Landlord an amount which when added to the Tax Escrow Payments (as defined herein) will result in there being an amount on deposit sufficient to pay the Taxes at least two (2) months prior to the due date thereof (“Initial Tax Escrow Payment”). Thereafter, Tenant shall, in addition to and concurrently with the payment of Basic Rent as required in Section 1.05 hereof, pay one-twelfth of the amount (as estimated by Landlord) of the annual Taxes (each such payment, a “Tax Escrow Payment” and together with the Initial Tax Escrow Payment hereinafter collectively referred to as the “Tax Escrow Payments”) next becoming due and payable with respect to the Premises. Tenant shall also pay to Landlord on demand therefor the amount by which the actual Taxes exceed the payment by Tenant required in this subsection. Notwithstanding anything to the contrary contained in this Lease, so long as Tenant shall have complied with its obligations under this Section 5.02(c), Landlord shall be solely liable for the application of the Tax Escrow Payments to the actual payment of Taxes as and when the same become due. Any excess Tax Escrow Payments remaining at the expiration of the Term shall be refunded to Tenant; provided, however, in the event there shall be an uncured Event of Default at the expiration of the Term, only that portion of any Tax Escrow Payments remaining that are in excess of any liability of Tenant for such uncured Event of Default, if any, shall be refunded to Tenant.
Section 5.03 Liens. Tenant will remove and discharge any charge, lien, security interest or encumbrance upon the Premises or upon any Basic Rent, additional rent or other sums payable hereunder which arises for any reason, including all liens which arise out of the possession, use, occupancy, construction, repair or rebuilding of the Premises or by reason of labor or materials furnished to Tenant or for the Premises, but not including (i) the Permitted Exceptions, (ii) this Lease and any assignment hereof or any sublease permitted hereunder, (iii) any mortgage, charge, lien, security interest or encumbrance created or caused by or through Landlord or its agents, employees or representatives without the consent of Tenant, and (iv) any liens, charges, security interests or encumbrances granted by Tenant against any Severable Property. Tenant may provide a bond or other security reasonably acceptable to Landlord (but in no event greater in amount than the amount of such encumbrance) to remove or pay all costs associated with the removal of any such lien, provided the conditions of Section 5.05 shall be satisfied. Nothing contained in this Lease shall be construed as constituting the consent or request of Landlord, express or implied, to or for the performance (on behalf of or for the benefit of Landlord) by any contractor, laborer, materialman or vendor, of any labor or services or for the furnishing of any materials for any construction, alteration, addition, repair or demolition of or to the Premises or any part thereof. NOTICE IS HEREBY GIVEN THAT LANDLORD WILL NOT BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO TENANT, OR TO ANYONE HOLDING AN INTEREST IN THE PREMISES OR ANY PART THEREOF THROUGH OR UNDER TENANT, AND THAT NO MECHANIC’S OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF LANDLORD IN AND TO THE PREMISES UNLESS BY OR THROUGH LANDLORD OR ITS AGENTS, EMPLOYEES OR REPRESENTATIVES.
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Section 5.04 Indemnification.
(a) Except for the gross negligence or willful misconduct of any Indemnified Party (as defined herein), Tenant shall defend all actions against Landlord and any partner, officer, director, member, employee or shareholder of the foregoing (collectively, “Indemnified Parties”), with respect to, and shall pay, protect, indemnify and save harmless the Indemnified Parties from and against, any and all liabilities, losses, damages, costs, expenses (including reasonable attorneys’ fees and expenses), causes of action, suits, claims, demands or judgments of any nature arising from (i) injury to or death of any person, or damage to or loss of property, on or about the Premises that occurred during the Term or connected with the use, condition or occupancy of the Premises, (ii) default by Tenant under this Lease, (iii) use, act or omission of Tenant or its agents, contractors, licensees, subtenants or invitees, (iv) contest referred to in Section 5.05 of this Lease, and (v) liens against the Premises in violation of Section 5.03 of this Lease, to the extent that the foregoing does not arise from any Indemnified Party’s negligence or intentional misconduct. The obligations of Tenant under this Section 5.04 shall survive any termination, expiration, rejection in bankruptcy, or assumption in bankruptcy of this Lease.
(b) The rights and obligations of Landlord and Tenant with respect to claims by Landlord against Tenant brought pursuant to this Section 5.04 and Section 5.06 shall be subject to the following conditions:
(i) If Landlord receives notice of the assertion of any claim for which it intends to seek indemnification under this Section 5.04 or Section 5.06, Landlord shall promptly provide written notice of such assertion to Tenant; provided that failure of Landlord to give Tenant prompt notice as provided herein shall not relieve Tenant of any of its obligations hereunder, except to the extent the Tenant is prejudiced by such failure. The notice shall describe in reasonable detail the nature of the claim and the basis for an indemnification claim under Section 5.04 or Section 5.06, and shall be accompanied by all papers and documents which have been served upon Landlord and such other documents and information as may be appropriate to an understanding of such claim and the liability of Tenant to indemnify Landlord hereunder. Except as required by law, the Landlord shall not answer or otherwise respond to such claim or take any other action which may prejudice the defense thereof unless and until Tenant has been given the opportunity to assume the defense thereof as required by this Section 5.04 and refused to do so.
(ii) Upon receipt of an indemnification notice under this Section 5.04, the Tenant shall have the right, but not the obligation, to promptly assume and take exclusive control of the defense, negotiation and/or settlement of such claim with counsel selected by Tenant and approved by Landlord; provided, however, that if either Landlord or Tenant determines the representation of both parties by Tenant would be inappropriate due to actual or potential conflict of interests between them, then Tenant shall not be obligated to assume such defense on behalf of Landlord, but such conflict shall not lessen Tenant’s indemnity and hold harmless obligations hereunder. In the event of a conflict of interest or dispute or during the continuance of an Event of Default, Landlord shall have the right to select counsel, and the reasonable cost of such counsel shall be paid by Tenant. The parties acknowledge that, with respect to claims for which insurance is available, the rights of the parties to select counsel for the defense of such claims shall be subject to such approval rights as the insurance company providing coverage may have.
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(iii) The party controlling the defense of a claim shall keep the other party reasonably informed at all stages of the defense of such claim. The party not controlling the defense of any claim shall have the right, at its sole cost and expense, to participate in, but not control, the defense of any such claim. Each party shall reasonably cooperate with the other in the defense, negotiation and/or settlement of any such claim. In connection with any defense of a claim undertaken by Tenant, Landlord shall provide Tenant, and its counsel, accountants and other representatives, with reasonable access to relevant books and records and make available such personnel of Landlord as Tenant may reasonably request.
Section 5.05 Permitted Contests. Tenant, at its expense, may contest, by appropriate legal proceedings conducted in good faith and with due diligence, any Legal Requirements with which Tenant is required to comply pursuant to Section 5.02(b) or any Environmental Law under Section 5.06, or the amount or validity or application, in whole or in part, of any tax, assessment or charge which Tenant is obligated to pay or any lien, encumbrance or charge not permitted by Sections 5.02(a), 5.03 and 6.01, provided that unless Tenant has already paid such tax, assessment or charge, such contest may be undertaken by Tenant only in compliance with the following conditions: (i) the commencement of such proceedings shall suspend the enforcement or collection thereof against or from Landlord and against or from the Premises, (ii) neither the Premises nor any rent therefrom nor any part thereof or interest therein would be in any danger of being sold, forfeited, attached or lost, (iii) Tenant shall have furnished such security, if any, as may be required in the proceedings and as may be reasonably required by Landlord, and (iv) if such contest be finally resolved against Tenant, Tenant shall promptly pay the amount required to be paid, together with all charges, fees and penalties accrued thereon. So long as no Event of Default has occurred and is continuing, Landlord, at Tenant’s expense, shall execute and deliver to Tenant such authorizations and other documents as reasonably may be required in any such contest. Tenant shall indemnify and hold Landlord harmless against any cost or expense of any kind that may be imposed upon Landlord in connection with any such contest and any loss resulting therefrom. Notwithstanding any other provision of this Lease to the contrary, Tenant shall not be in default hereunder in respect to the compliance with any Legal Requirements with which Tenant is obligated to comply pursuant to Section 5.02(b), any Environmental Law under Section 5.06, or in respect to the payment of any tax, assessment or charge which Tenant is obligated to pay or any lien, encumbrance or charge not permitted by Sections 5.02(a), 5.03 and 6.01 which Tenant is in good faith contesting.
Section 5.06 Environmental Compliance.
(a) For purposes of this Lease:
(i) the term “Environmental Laws” shall mean and include the Resource Conservation and Recovery Act, as amended by the Hazardous and Solid Waste Amendments of 1984, the Comprehensive Environmental Response, Compensation and Liability Act, the Hazardous Materials Transportation Act, the Toxic Substances Control Act, the Federal Insecticide, Fungicide and Rodenticide Act and all applicable federal, state and local environmental laws, ordinances, rules, requirements, regulations and publications, as any of the foregoing may have been or may be from time to time amended, supplemented or supplanted and any and all other federal, state or local laws, ordinances, rules, requirements, regulations and publications, now or hereafter existing, relating to (i) the preservation or regulation of the public health, safety, welfare or environment, (ii) the regulation or control of toxic or hazardous substances or materials, or (iii) any wrongful death, personal injury or
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property damage that is caused by or related to the presence, growth, proliferation, reproduction, dispersal, or contact with any biological organism or portion thereof (living or dead), including molds or other fungi, bacteria or other microorganisms or any etiologic agents or materials; and
(ii) the term “Regulated Substance” shall mean and include any, each and all substances, biological and etiologic agents or materials now or hereafter regulated pursuant to any Environmental Laws, including any such substance, biological or etiological agent or material now or hereafter defined as or deemed to be a “regulated substance,” “pesticide,” “hazardous substance” or “hazardous waste” or included in any similar or like classification or categorization thereunder, petroleum or petroleum by-products, and asbestos and asbestos-containing materials.
(b) Tenant shall:
(i) not cause or permit any Regulated Substance to be placed, held, located, released, transported or disposed of on, under, at or from the Premises except in full compliance with Environmental Laws;
(ii) contain at or remove from the Premises, or perform any other necessary remedial action regarding, any Regulated Substance in any way affecting the Premises if, as and when such containment, removal or other remedial action is either (1) required under any Environmental Laws or (2) whether or not so required, such Regulated Substance in any way materially adversely affects the Premises, and, upon reasonable request of Landlord after consultation with Tenant (which request may be given only if Landlord has received information such that it reasonably believes that environmental contamination exists which may violate Environmental Laws or have a material adverse effect on the Premises), shall arrange a Site Assessment (as such term is defined in Section 5.06(c)), or such other or further testing or actions as may be required by Environmental Laws or as may be mutually agreed to by Landlord and Tenant, to be conducted at the Premises by qualified companies retained by Tenant specializing in environmental matters and reasonably satisfactory to Landlord in order to ascertain compliance with all Environmental Laws and the requirements of this Lease, all of the foregoing to be at Tenant’s sole cost and expense;
(iii) provide Landlord with written notice (and a copy as may be applicable) of any of the following within ten (l0) days of receipt thereof: (A) Tenant’s obtaining knowledge or notice of any kind of the material presence, or any actual or threatened release, of any Regulated Substance in any way materially adversely affecting the Premises; (B) Tenant’s receipt or submission, or Tenant’s obtaining knowledge or notice of any kind, of any report, citation, notice or other communication from or to any federal, state or local governmental or quasi-governmental authority regarding any Regulated Substance in any way materially adversely affecting the Premises; or (C) Tenant’s obtaining knowledge or notice of any kind of the incurrence of any cost or expense by any federal, state or local governmental or quasi governmental authority or any private party in connection with the assessment, monitoring, containment, removal or remediation of any kind of any Regulated Substance, or of the filing or recording of any lien on the Premises or any portion thereof in connection with any such action or Regulated Substance; and
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(iv) in addition to the requirements of Section 5.04 hereof, defend all actions against the Indemnified Parties and pay, protect, indemnify and save harmless the Indemnified Parties from and against any and all liabilities, losses, damages, costs, expenses (including reasonable attorneys’ fees and expenses), causes of action, suits, claims, demands or judgments of any nature relating to any Environmental Laws, Regulated Substances or other environmental matters as all pertain to the Premises, except to the extent caused by or through the grossly negligent conduct or willful misconduct of Landlord, Mortgagee, or their respective agents, employees or representatives. The indemnity contained in this Section 5.06 shall survive the expiration or earlier termination of this Lease, unless at the time of or after such expiration or earlier termination of this Lease, Tenant provides Landlord a Site Assessment acceptable to Landlord showing the Premises to be (1) free of all Regulated Substances except those placed on the Premises by Landlord, Mortgagee, or their agents, employees or representatives, and (2) not in violation of Environmental Laws and that there exists no condition which could result in any violations of Environmental Laws.
(c) Upon reasonable cause and three (3) business days prior written notice from Landlord, Tenant shall permit such reasonably qualified persons as Landlord may designate (“Site Reviewers”) to visit the Premises during reasonable times during normal business hours and perform reasonable environmental site investigations and assessments (“Site Assessments”) on the Premises for the purpose of determining whether there exists on, under or at the Premises any Regulated Substance or violation of Environmental Laws or any condition which could result in any violations of Environmental Laws. Such Site Assessments may include both above and below the ground environmental testing for violations of Environmental Laws and such other tests as may be necessary, in the reasonable opinion of the Site Reviewers, to conduct the Site Assessments. Tenant shall supply to the Site Reviewers such historical and operational information regarding the Premises as may be reasonably requested by the Site Reviewers to facilitate the Site Assessments and shall make available for meetings with the Site Reviewers appropriate personnel having knowledge of such matters. The cost of performing and reporting a Site Assessment under this subsection shall be paid by Landlord, unless the Site Assessment indicates that there exists on, under or at the Premises any Regulated Substance in material violation of Environmental Laws or a material violation of Environmental Laws, in which case the cost of performing and reporting a Site Assessment under this subsection shall be paid by Tenant.
(d) If any violation of Environmental Laws occurs or is found to exist or if Tenant is otherwise required under the provisions of this Section 5.06 to perform remediation or undertake any other response action, and, in Landlord’s reasonable judgment based upon the written bids of reputable environmental professionals, the cost of remediation of, or other response action with respect to, the same is likely to exceed $100,000, Tenant shall provide to Landlord, within ten (10) days after Landlord’s request therefor, adequate financial assurances that Tenant will effect such remediation or other response action in accordance with applicable Environmental Laws and the requirements of this Lease. Such financial assurances shall be a bond or letter of credit reasonably satisfactory to Landlord in form and substance and in an amount equal to one hundred fifty percent (150%) of Landlord’s reasonable estimate of the anticipated cost of such remedial or other response action, based upon a Site Assessment performed pursuant to Section 5.06(c). Notwithstanding any other provision of this Lease, if a violation of Environmental Laws occurs or is found to exist and the Term would otherwise terminate or expire, and the Premises cannot be rented to another Tenant on commercially reasonable terms during the remedial or other response action, then, at the option of Landlord, the Term shall be automatically extended beyond the date of termination or expiration and
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this Lease shall remain in full force and effect beyond such date until the earlier to occur of (i) the completion of all remedial or other response action in accordance with applicable Environmental Laws, or (ii) the date specified in a written notice from Landlord to Tenant terminating this Lease.
(e) If Tenant fails to correct any violation of Environmental Laws which occurs or is found to exist or fails to undertake and complete any other remediation or response action required under the provisions of this Section 5.06, Landlord shall have the right (but no obligation) to take any and all actions as Landlord shall reasonably deem necessary or advisable in order to cure such violation of Environmental Laws or complete such remediation or other response action, and in such event all reasonable expenses incurred by Landlord in connection therewith (including attorneys’ fees and expenses) shall constitute additional rent under this Lease and shall be paid by Tenant to Landlord upon demand, together with an additional charge calculated at the rate of fifteen percent (15%) per annum until paid.
(f) All future leases, subleases or use agreements permitted by this Lease relating to the Premises entered into by Tenant shall contain covenants of the other party not to at any time (i) cause any violation of Environmental Laws to occur or (ii) permit any Person occupying the Premises through such an agreement to cause any violation of Environmental Laws to occur.
ARTICLE VI
Section 6.01 Condemnation and Casualty.
(a) General Provisions. Except as otherwise provided in this Section 6.01, Tenant hereby irrevocably assigns to Landlord any award, compensation or insurance payment to which Tenant may become entitled by reason of Tenant’s interest in the Premises (i) if the use, occupancy or title of the Premises or any part thereof is taken, requisitioned or sold in, by or on account of any actual or threatened eminent domain proceeding or other action by any Person having the power of eminent domain (“Condemnation”) or (ii) if the Premises or any part thereof is damaged or destroyed by fire, flood or other casualty (“Casualty”). All awards, compensations and insurance payments on account of any Condemnation or Casualty are herein collectively called “Compensation”. Landlord shall be entitled to any and all Compensation which may be paid or made in connection with a Condemnation or Casualty, and Tenant shall have no claim against Landlord for the value of any unexpired portion of this Lease. Tenant may not unilaterally negotiate, prosecute or adjust any claim for Compensation unless Tenant has obtained Landlord’s prior written consent. Notwithstanding the foregoing, if permissible under Legal Requirements, any separate Compensation for Tenant’s moving and relocation expenses, its anticipated loss of business profits, or its loss of Tenant’s Improvements, as defined below, in connection with a Condemnation or in connection with Tenant’s insurance under Section 6.02, may be paid directly to and shall be retained by Tenant (and shall not be deemed to be Compensation), and Tenant shall have no obligation to deliver any such funds to Landlord, provided that, in the case of a Condemnation, Tenant’s claims may not reduce Landlord’s award. All Compensation shall be applied pursuant to this Section 6.01(a).
(b) Substantial Condemnation during the Term. If a final, non-appealable judgment of Condemnation shall be rendered or if Landlord shall grant a deed or other instrument in lieu of such taking by eminent domain or condemnation which, in either case, affects all or a substantial portion of the Premises and shall render the Improvements permanently untenantable for Tenant’s use and occupancy in Tenant’s business, then Tenant may, not later than sixty (60) days
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after a determination has been made as to when possession of the Premises must be delivered with respect to such Condemnation (the “Delivery Date”), deliver to Landlord (i) notice of its intention to terminate this Lease on a rental payment date which occurs no more than sixty (60) days prior to the Delivery Date (the “Condemnation Termination Date”), (ii) a certificate of an authorized officer of Tenant describing the event giving rise to such termination and stating that such Condemnation has rendered the Improvements permanently untenantable for Tenant’s use and occupancy in Tenant’s business, and (iii) payment of all Basic Rent, additional rent and other sums then due and payable hereunder to and including the Condemnation Termination Date, in which case this Lease shall terminate on the Condemnation Termination Date, except with respect to obligations and liabilities of Tenant hereunder, actual or contingent, which have accrued on or prior to the Condemnation Termination Date and those which by the provisions of this Lease expressly survive the expiration of the Term. If a final, non-appealable judgment of Condemnation shall be rendered or if Landlord shall grant a deed or other instrument in lieu of such taking by eminent domain or condemnation which, in either case, affects all or a substantial portion of the Premises, Landlord shall have the option, upon ninety (90) days’ written notice to Tenant, to terminate this Lease effective as of the Delivery Date and, in this event, rent shall be apportioned, and the Lease shall terminate, as of the Delivery Date, except with respect to Lease obligations and liabilities of Tenant, actual or contingent, which have accrued on or prior to the Delivery Date and those which by the provisions of this Lease expressly survive the expiration of the Term.
(c) Substantial Casualty during the Last Two Years of the Term. If an insured Casualty shall occur with respect to all or a substantial portion of the Improvements during the last two (2) years of the Term and shall, in the reasonable opinion of a reputable contractor or architect designated by Landlord, render the Improvements untenantable for Tenant’s use and occupancy in Tenant’s business for a period of greater than one hundred eighty (180) days, then Tenant may, not later than sixty (60) days after such Casualty, deliver to Landlord (i) notice of its intention to terminate this Lease on the next rental payment date which occurs not less than sixty (60) days after the delivery of such notice (the “Casualty Termination Date”), (ii) a certificate of an authorized officer of Tenant describing the event giving rise to such termination and stating that such Casualty has rendered the Improvements permanently untenantable for Tenant’s use and occupancy in Tenant’s business, (iii) documentation to the effect that termination of this Lease will not be in violation of any agreement then in effect with which Tenant is obligated to comply pursuant to this Lease, and (iv) payment of all Basic Rent, additional rent and other sums then due and payable hereunder to and including the Casualty Termination Date, in which case this Lease shall terminate on the Casualty Termination Date, except with respect to obligations and liabilities of Tenant hereunder, actual or contingent, which have accrued on or prior to the Casualty Termination Date and those which by the provisions of this Lease expressly survive the expiration of the Term.
(d) Less Than Substantial Condemnation or any Casualty. Tenant shall give prompt notice to Landlord of any damage to the Premises resulting from a Casualty. If, after a Condemnation or Casualty, Landlord or Tenant, as applicable, does not give, or does not have the right to give, notice of its intention to terminate this Lease, then this Lease shall continue in full force and effect and Landlord shall restore the Premises to substantially the same condition as existed prior to the Casualty or, in the case of Condemnation, as nearly as practicable to the same condition, except, in either case, for modifications (a) required by zoning and building codes or other Legal Requirements, (b) by the holder of a mortgage on the Premises, or (c) agreed to by Landlord and Tenant. Notwithstanding the foregoing, Landlord shall not be obligated to restore any of Tenant’s fixtures, machinery, furniture, inventory, equipment or personal property, including any Severable
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Property (collectively, “Tenant’s Improvements”). Landlord’s restoration obligations shall be subject to reasonable delays for insurance adjustment (if applicable), matters beyond Landlord’s reasonable control, and the terms of this Article VI. Other than as specifically stated in Section 6.01, Landlord shall not be liable for any inconvenience or annoyance to Tenant or its visitors, or injury to Tenant’s business resulting in any way from a Casualty or Condemnation or the repair thereof.
(e) Casualty - Option Not to Rebuild. Notwithstanding anything contained to the contrary in this Lease, Landlord may elect not to rebuild and/or restore the Premises and/or Improvements, and instead may terminate this Lease, by notifying Tenant in writing of such termination within sixty (60) days after the date of discovery of the damage, such notice to include a termination date giving Tenant no less than ninety (90) days to vacate the Premises, but Landlord may so elect only if the Improvements shall be damaged by fire or other Casualty or cause and one or more of the following conditions is present: (i) in Landlord’s reasonable judgment, repairs cannot reasonably be completed within two hundred seventy (270) days after the date of discovery of the damage (when such repairs are made without the payment of overtime or other premiums); (ii) the holder of any mortgage on the Premises, any ground lessor with respect to the Improvements or Premises, or other party entitled to the insurance proceeds fails to make such proceeds available to Landlord in an amount sufficient for restoration of the Premises (or shall terminate the ground lease, as the case may be); (iii) the insurance proceeds receivable by Landlord are insufficient to cover the cost of Landlord’s restoration obligations; (iv) Landlord decides to rebuild the Premises and/or Improvements so that they will be substantially different structurally or architecturally; or (v) the damage occurs during the last twelve (12) months of the Term.
(f) Notwithstanding anything to the contrary in this Lease, all of the foregoing provisions of this Section 6.01 shall be subject and subordinate to any provisions to the contrary contained in any subordination, non-disturbance and attornment agreement between Tenant and any applicable Mortgagee.
Section 6.02 Tenant’s Insurance.
(a)Tenant will maintain insurance on the Premises of the following character throughout the Term of the Lease:
(i) Insurance (on an occurrence basis) against all risks of direct physical loss (“Causes of Loss - Special Form”), including loss by fire, lightning, flooding (if the Premises are in a flood zone), earthquakes (if the Premises are in an earthquake zone), and other risks which at the time are included under “extended coverage” endorsements, on ISO form CP1030, or its equivalent, in amounts sufficient to prevent Landlord and Tenant from becoming a coinsurer of any loss but in any event in amounts not less than 100% of the actual replacement cost of all of its machinery, equipment, furniture, inventory, fixtures, and personal property, including property under the case, custody or control of Tenant (“Tenant’s Insurable Property”) and with deductibles of not more than $100,000 per occurrence. The insurance required herein shall, among other things, provide coverage for water damage of any type, including sprinkler leakage, bursting of pipes, etc., damage to alterations, inventory, furniture, furnishings, trade or business fixtures, decorations, computers or electronics, cabling and equipment. It is understood by Tenant that Landlord will not carry insurance on, or be responsible for, any losses associated with Tenant’s property;
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(ii) Commercial general liability insurance (on an occurrence basis), on ISO form CG 0001, or its equivalent or a form otherwise acceptable to Owner, against claims for bodily injury, death or property damage occurring on, in or about the Premises in the minimum amounts of $1,000,000 per occurrence, $2,000,000 in the annual aggregate and $2,000,000 for products completed operations coverage, and such policy shall also include coverage for elevators/escalators (if any), contractual liability will be provided as broad as that which is provided by the Commercial General Liability coverage form. for all insured contracts and Products/Completed Operations Liability coverage which shall be maintained for not less than the greater period under which a claim may be properly asserted under the applicable statute of limitations or statute of repose and issued on a per occurrence basis during the policy term. Such policy shall include deductibles/retentions of not more than $500,000 per occurrence;
(iii) Rent loss insurance or business interruption insurance in an amount sufficient to cover loss of rents from the Premises pursuant to this Lease for a period of at least twelve (12) months (including a 180-day extended period of indemnity), with endorsements to cover interruption of utilities outside of the Premises;
(iv) Worker’s compensation insurance to the extent required by the law of the state in which the Premises are located;
(v) Employers’ Liability insurance covering all persons employed by Tenant in the amount of $1,000,000 per accident, $1,000,000 per illness, per employee, and $1,000,000 per illness, in the aggregate. Landlord reserves the right to have evidence shown that any self-insurance program has been accepted by the state in which the Premises are located;
(vi) Business Automobile Liability Insurance (including Owned – if any; Non-Owned and Hired Automobile Liability) in an amount of $1,000,000 Auto Liability limit each accident;
(vii) Excess/Umbrella Liability in an amount of not less than $5,000,000 on a per location basis which includes Follow Form coverage for Commercial General Liability, Business Automobile Liability and Employers’ Liability coverages. Such Excess/Umbrella Liability policy shall be endorsed to provide that such insurance shall be primary to, and non-contributory with, any other insurance on which Landlord and the Additional Insureds are an insured, whether such other insurance is primary, excess, self-insurance, or insurance on any other basis. This endorsement shall cause the Tenant’s Excess/Umbrella Liability coverage to be vertically exhausted, whereby such coverage is not subject to any “Other Insurance” provision under Tenant’s Commercial General Liability or Umbrella/Excess Liability policies. Provided, that a Tenant policy that provides blanket Primary and Non-Contributory and Additional Insured provisions to third parties under a written contract or agreement satisfies the foregoing. Such policy shall be maintained for not less than the greater period under which a claim may be properly asserted under the applicable statute of limitations or statute of repose;
(viii) During any period in which substantial alterations at such Premises are being undertaken, builder’s risk insurance covering the total completed value, including all hard and soft costs (which shall include business interruption coverage) with respect to the
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Improvements being constructed, altered or repaired (on a completed value, non-reporting basis), replacement cost of work performed and equipment, supplies and materials furnished in connection with such construction, alteration or repair of Improvements or Equipment, together with such other endorsements as Landlord may reasonably require, and general liability, worker’s compensation and automobile liability insurance with respect to the Improvements being constructed, altered or repaired, in such form and in such amounts as Landlord may reasonably require. Such policies shall name Landlord and Mortgagee as named insured, mortgagee, additional insureds and/or loss payees with respect to such Premises, as applicable. If applicable, the policy must include ISO endorsement CG 24 17 10/01-Contractual Liability-Railroads, or its equivalent and must not contain any exclusion for work or operations within fifty (50) feet of a railroad, light rail, subway or similar tracked conveyance; and
(ix) Such other insurance in such kinds and amounts, with such deductibles and against such risks, as Mortgagee may reasonably require or as is commonly obtained in the case of property similar in use to the Premises and located in the state in which the Premises are located by prudent owners of such property.
GL, Auto, and Umbrella insurance shall be primary and non-contributory to any insurance carried by Landlord and Additional Insureds and written by companies authorized to do business in the state where the Premises are located and carrying a claims paying ability rating of at least A: XII by A.M. Best or A- by Standard and Poor’s, as applicable, and with the exception of workers’ compensation insurance, shall name Landlord, Mortgagee, Indemnified Parties, Landlord’s property manager and any other party identified by Landlord in writing from time to time, as additional insureds (collectively, the “Additional Insureds”) on a primary and non-contributory basis.
(b) Every policy referred to in subsection 6.02(a) shall provide that it will not be cancelled or amended except after thirty (30) days’ written notice to Landlord and the Mortgagee and that it shall not be invalidated by any act or negligence of Landlord, Tenant or any Person having an interest in the Premises, nor by occupancy or use of the Premises for purposes more hazardous than permitted by such policy, nor by any foreclosure or other proceedings relating to the Premises, nor by change in title to or ownership of the Premises and every such policy shall include a waiver of subrogation in favor of Landlord and Additional Insureds.
(c) Tenant shall deliver to Landlord certificates of insurance, in form and content satisfactory to Landlord, evidencing the existence of all insurance which is required to be maintained by Tenant hereunder and payment of all premiums therefor, such delivery to be made (i) upon Tenant’s execution and delivery of the Lease and (ii) prior to the expiration of any such insurance. Tenant shall deliver all policies to Landlord upon request.
(d) Tenant shall not obtain or carry separate insurance concurrent in form or contributing in the event of loss with that required by this Section 6.02 unless Landlord and Additional Insureds are named as additional insureds therein and unless there is a mortgagee endorsement in favor of Mortgagee with loss payable as provided herein. Tenant shall immediately notify Landlord whenever any such separate insurance is obtained and shall deliver to Landlord the policies or certificates evidencing the same. Any insurance required hereunder may be provided under blanket policies, provided that the Premises are specified therein.
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(e) If an Event of Default shall occur, upon the request of Landlord, and provided Mortgagee shall so require, Tenant shall, in addition to and concurrently with the payment of Basic Rent as required in Section 1.05 hereof, pay one-twelfth of the amount (as estimated by Landlord, as applicable) of the annual premiums for insurance (collectively, the “Insurance Escrow Payments”) required under this Section 6.02 next becoming due and payable with respect to the Premises. Tenant shall also pay to Landlord on demand therefor the amount by which the actual insurance premiums exceed the payment by Tenant required in this subsection.
(f) The requirements of this Section 6.02 shall not be construed to negate or modify Tenant’s obligations under Section 5.04.
(g) Subject to exceptions and standards approved in writing from time to time by Landlord, Tenant shall use commercially reasonable efforts to contractually require of all contractors, subcontractors, service providers and vendors who perform work or services to the Premises to, at their own expense, maintain insurance coverages equivalent to those standard in the industry but in no event less than the primary general liability and workers’ compensation limits required for Tenant herein. Each contractor, subcontractor, service provider, and vendor shall be required to include the same Additional Insureds, primary and non-contributory, waiver of subrogation, and certificates of insurance requirements as required of Tenant herein. Upon request from Landlord, Tenant shall provide, at its sole expense, all contracts and accompanying certificates of insurance, endorsements and policy forms related to any work or services to the Premises to Landlord. Tenant will cause such coverage to be maintained for not less than the greater period under which a claim may be properly asserted under the applicable statute of limitations or repose.
(h) Tenant shall be solely responsible for all costs, including premiums, deductibles, and self-insured retentions, associated with the insurance required under Section 6.02 of this Agreement.
Section 6.03 Landlord’s Insurance. Landlord shall maintain its usual (i) liability insurance, (ii) pollution insurance, and (iii) property insurance to insure all Improvements (with the exception of Tenant’s Insurable Property) in an amount equivalent to the full replacement value thereof against perils customarily covered including but not limited to windstorms, named windstorm hail, explosion, vandalism, malicious mischief, flood, earthquake, civil commotion, equipment breakdown, loss of rents and (vi) such other coverage as Landlord may deem appropriate or necessary (collectively, “Landlord’s Insurance”) and Landlord agrees that any property policy of insurance shall contain a waiver of subrogation clause as to Tenant and Tenant's employees. All costs, premiums, deductibles, and retentions due for Landlord’s Insurance, and any consulting fees incurred to procure and maintain such coverage, shall be additional rent.
ARTICLE VII
Section 7.01 Conditional Limitations; Default Provisions.
(a) Any of the following occurrences or acts shall constitute an Event of Default under this Lease:
(i) If Tenant shall (1) fail to pay any Basic Rent, recurring additional rent or other recurring sum when due or (2) fail to observe or perform any other provision hereof not otherwise specifically described in this Section 7.01(a) and such non-monetary
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failure shall continue for thirty (30) days after written notice to Tenant of such failure (provided that, in the case of any such failure which cannot be cured by the payment of money and cannot with diligence be cured within such thirty (30) day period, if Tenant shall commence promptly to cure the same and thereafter prosecute the curing thereof with diligence, the time within which such failure may be cured shall be extended for such period not to exceed ninety (90) days as is necessary to complete the curing thereof with diligence);
(ii) If any representation or warranty of Tenant set forth in this Lease or any certificate provided by Tenant pursuant to this Lease, shall prove to be incorrect in any material respect as of the time when the same shall have been made;
(iii) If Tenant shall file a petition in bankruptcy or for reorganization or for an arrangement pursuant to any federal or state law or shall be adjudicated a bankrupt or become insolvent or shall make an assignment for the benefit of creditors, or if a petition proposing the adjudication of Tenant as a bankrupt or its reorganization pursuant to any federal or state bankruptcy law or any similar federal or state law shall be filed in any court and Tenant shall consent to or acquiesce in the filing thereof or such petition shall not be discharged or denied within ninety (90) days after the filing thereof;
(iv) If a receiver, trustee or conservator of Tenant, or of all or substantially all of the assets of Tenant, or of the Premises or Tenant’s estate therein shall be appointed in any proceeding brought by Tenant, or if any such receiver, trustee or conservator shall be appointed in any proceeding brought against Tenant and shall not be discharged within ninety (90) days after such appointment, or if Tenant shall consent to or acquiesce in such appointment;
(v) If the Premises shall have been abandoned for a period of twenty (20) consecutive days;
(vi) If a Letter of Credit has been posted as the Security Deposit or other security hereunder, and the issuer of the Letter of Credit cancels, terminates or refuses to honor it, and Tenant shall fail to renew the Letter of Credit within thirty (30) days or shall fail to post a cash equivalent amount of the Letter of Credit or a replacement letter of credit within fifteen (15) days after notice of such cancellation, termination or refusal;
(vii) If a monetary Event of Default occurs under this Lease three (3) times within any consecutive twelve (12) month period, irrespective of whether or not such monetary Event of Default is cured;
(viii) If Tenant assigns this Lease or sublets the Premises without Landlord’s consent in violation of Section 4.01 hereof or without complying with the express terms of Section 4.03 hereof;
(ix) If any breach occurs under Section 5.06 hereof;
(x) If Tenant fails to deliver any financial statements or reports required to be delivered under this Lease, provided that if the failure continues for less than thirty (30) days after written notice to Tenant of such failure, Tenant may cure such Event of Default by delivering such financial statements and reports within thirty (30) days after the same are due
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and paying Landlord $100 per week that the financial statements are due, which shall be Landlord’s sole remedy so long as (1) the financial statements and reports are delivered within such thirty (30) day period, and (2) Tenant has not failed to deliver such financial statement or reports for any other period within the immediately preceding twelve (12) month period, irrespective of whether or not such Event of Default is cured,
(xi) If any breach pursuant to a Mortgage occurs due to the acts or omissions of Tenant or its respective Affiliates, employees, contractors, or sublessees, and
(b) If an Event of Default shall have happened and be continuing, Landlord shall have the right to give Tenant notice of Landlord’s termination of the Term. Upon the giving of such notice, the Term and the estate hereby granted shall expire and terminate on such date as fully and completely and with the same effect as if such date were the date herein fixed for the expiration of the Term, and all rights of Tenant hereunder shall expire and terminate, but Tenant shall remain liable as hereinafter provided.
(c) If an Event of Default shall have happened and be continuing, Landlord shall have the immediate right, whether or not the Term shall have been terminated pursuant to subsection 7.01(b), to reenter and repossess the Premises and the right to remove all persons and property (subject to Section 3.02) therefrom by summary proceedings, ejectment or any other legal action or in any lawful manner Landlord determines to be necessary or desirable. Landlord shall be under no liability by reason of any such reentry, repossession or removal. No such reentry, repossession or removal shall be construed as an election by Landlord to terminate the Term unless a notice of such termination is given to Tenant pursuant to subsection 7.0l(b) or unless such termination is decreed by a court.
(d) At any time or from time to time after a reentry, repossession or removal pursuant to subsection 7.0l(c), whether or not the Term shall have been terminated pursuant to subsection 7.0l(b), Landlord may relet the Premises for the account of Tenant, in the name of Tenant or Landlord or otherwise. Landlord may collect any rents payable by reason of such reletting. Landlord shall not be liable for any failure to relet the Premises or for any failure to collect any rent due upon any such reletting. To the extent required by applicable Legal Requirements, Landlord agrees to make reasonable efforts to mitigate its damages under this Lease in the event Tenant actually vacates or advises Landlord that it is, as of a specified date, to vacate the Premises. The phrase “reasonable efforts,” as it relates to Landlord’s duty to attempt to relet the Premises, shall require Landlord to do only the following: (i) notify Landlord’s management company, if any, in writing of the availability of the Premises for reletting and authorize same to advertise as appropriate, (ii) post Landlord’s leasing contact telephone number in an appropriate area of the Premises, and (iii) show the Premises to any prospective Tenant interested in the Premises and to any prospective Tenant specifically referred to Landlord by Tenant. Under any requirement of Landlord to use reasonable efforts as described herein, (A) Landlord shall not be required to relet the Premises ahead of any other properties in the same market not producing any income to Landlord; (B) Landlord shall be entitled to consider tenant quality, tenant-mix, the financial condition of any prospective tenant, the nature of the Premises, the proposed use of the Premises by any prospective tenant, and any rights of existing subtenants located in the Premises, in making any leasing decision without being deemed to have violated its mitigation requirement hereunder; and (C) under any new lease entered into by Landlord, Landlord may relet all or any portion of the Premises to create an appropriate block of space for a new tenant, may relet for a greater or lesser term than that remaining at that time under
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this Lease, and may include free rent, concessions, inducements, alterations and upgrades in the new lease. If a reletting occurs, Landlord shall recoup all of its expenses of reletting (including all expenses relating to remodeling, alterations, repairs, capital improvements, brokerage fees, decorating fees, and fees for architects, designers, space planners and attorneys) before Tenant is entitled to a credit on the damages owed by Tenant hereunder. If Landlord shall do all the foregoing then, anything in this Lease, or any statute, or common law rule to the contrary notwithstanding, Landlord shall be deemed to have met its duty (if any) to mitigate its damages hereunder.
(e) No expiration or termination of the Term pursuant to subsection 7.0l(b), by operation of law or otherwise, and no reentry, repossession or removal pursuant to subsection 7.0l(c) or otherwise, and no reletting of the Premises pursuant to subsection 7.0l(d) or otherwise, shall relieve Tenant of its liabilities and obligations hereunder, all of which shall survive such expiration, termination, reentry, repossession, removal or reletting other than as provided by applicable law.
(f) In the event of any expiration or termination of the Term or reentry or repossession of the Premises or removal of persons or property therefrom by reason of the occurrence of an Event of Default, Tenant shall pay to Landlord all Basic Rent, additional rent and other sums required to be paid by Tenant, in each case to and including the date of such expiration, termination, reentry, repossession or removal, and, thereafter, Tenant shall, until the end of what would have been the Term in the absence of such expiration, termination, reentry, repossession or removal and whether or not the Premises shall have been relet, be liable to Landlord for, and shall pay to Landlord, as liquidated and agreed current damages: (i) all Basic Rent, all additional rent and other sums which would be payable under this Lease by Tenant in the absence of any such expiration, termination, reentry, repossession or removal, together with all expenses of Landlord in connection with such reletting (including all repossession costs, brokerage commissions, reasonable attorneys’ fees and expenses (including fees and expenses of appellate proceedings), employee’s expenses, alteration costs and expenses of necessary preparation for such reletting), less (ii) the net proceeds, if any, of any reletting effected for the account of Tenant pursuant to subsection 7.01(d). Tenant shall pay such liquidated and agreed current damages on the dates on which rent would be payable under this Lease in the absence of such expiration, termination, reentry, repossession or removal, and Landlord shall be entitled to recover the same from Tenant on each such date.
(g) At any time after any such expiration or termination of the Term or reentry or repossession of the Premises or removal of persons or property therefrom by reason of the occurrence of an Event of Default, whether or not Landlord shall have collected any liquidated and agreed current damages pursuant to subsection 7.01(f), Landlord shall be entitled to recover from Tenant, and Tenant shall pay to Landlord on demand, as and for liquidated and agreed final damages for Tenant’s default and in lieu of all liquidated and agreed current damages beyond the date of such demand (it being agreed that it would be impracticable or extremely difficult to fix the actual damages), an amount equal to the excess, if any, of (i) the aggregate of all Basic Rent, additional rent and other sums which would be payable under this Lease, in each case from the date of such demand (or, if it be earlier, to date to which Tenant shall have satisfied in full its obligations under subsection 7.01(f) to pay liquidated and agreed current damages) for what would be the then unexpired Term in the absence of such expiration, termination, reentry, repossession or removal, discounted at the Reference Rate, over (ii) the then fair rental value of the Premises, discounted at the Reference Rate for the same period. If any law shall limit the amount of liquidated final damages to less than the amount above agreed upon, Landlord shall be entitled to the maximum amount allowable under such law.
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Section 7.02 Bankruptcy or Insolvency.
(a) If Tenant shall become a debtor in a case filed under Chapter 7 or Chapter 11 of the Bankruptcy Code and Tenant or Tenant’s trustee shall fail to elect to assume this Lease within sixty (60) days after the filing of such petition or such additional time as provided by the court within such sixty (60) day period, this Lease shall be deemed to have been rejected. Immediately thereupon, Landlord shall be entitled to possession of the Premises without further obligation to Tenant or Tenant’s trustee, and this Lease, upon the election of Landlord, shall terminate, but Landlord’s right to be compensated for damages (including liquidated damages pursuant to any provision hereof) or the exercise of any other remedies in any such proceeding shall survive, whether or not this Lease shall be terminated.
(b) Neither the whole nor any portion of Tenant’s interest in this Lease or its estate in the Premises shall pass to any trustee, receiver, conservator, assignee for the benefit of creditors or any other Person, by operation of law or otherwise under the laws of any state having jurisdiction of the person or property of Tenant, unless Landlord shall have consented to such transfer. No acceptance by Landlord of rent or any other payments from any such trustee, receiver, assignee, or Person shall be deemed to constitute such consent by Landlord nor shall it be deemed a waiver of Landlord’s right to terminate this Lease for any transfer of Tenant’s interest under this Lease without such consent.
Section 7.03 Additional Rights of Landlord.
(a) Except as provided in Section 7.01(g), no right or remedy hereunder shall be exclusive of any other right or remedy, but shall be cumulative and in addition to any other right or remedy hereunder or now or hereafter existing. Failure to insist upon the strict performance of any provision hereof or to exercise any option, right, power or remedy contained herein shall not constitute a waiver or relinquishment thereof for the future. Receipt by Landlord of any Basic Rent, additional rent or other sums payable hereunder with knowledge of the breach of any provision hereof shall not constitute waiver of such breach, and no waiver by Landlord of any provision hereof shall be deemed to have been made unless made in writing. Landlord shall be entitled to seek injunctive relief in case of the violation, or attempted or threatened violation, of any of the provisions hereof, or to a decree compelling performance of any of the provisions hereof, or to any other remedy allowed to Landlord by law or equity.
(b) Tenant hereby waives and surrenders for itself and all those claiming under it, including creditors of all kinds, (i) any right and privilege which it or any of them may have to redeem the Premises or to have a continuance of this Lease after termination of Tenant’s right of occupancy by order or judgment of any court or by any legal process or writ, or under the terms of this Lease, or after the termination of the Term as herein provided, (ii) the benefits of any law which exempts property from liability for debt and (iii) Tenant specifically waives any rights of redemption or reinstatement available by law or any successor law.
(c) If an Event of Default on the part of Tenant shall have occurred hereunder and be continuing, then, without thereby waiving such default, Landlord may, but shall be under no obligation to, take all action, including entry upon the Premises, to perform the obligation of Tenant hereunder immediately and without notice in the case of any emergency as may be reasonably determined by Landlord and upon five (5) business days’ notice to Tenant in other cases. All reasonable expenses incurred by Landlord in connection therewith, including attorneys’ fees and
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expenses (including those incurred in connection with any appellate proceedings), shall constitute additional rent under this Lease and shall be paid by Tenant to Landlord upon demand.
(d) If Tenant shall be in default in the performance of any of its obligations under this Lease beyond any applicable grace or cure period hereunder, Tenant shall pay to Landlord, on demand, all expenses incurred by Landlord as a result thereof, including reasonable attorneys’ fees and expenses (including those incurred in connection with any appellate proceedings) and any additional sums (including any late charge, default penalties, interest and fees of the counsel of Mortgagee) which are payable by Landlord to its Mortgagee by reason of Tenant’s late payment or non-payment of Basic Rent. If Landlord shall be made a party to any litigation commenced against Tenant and Tenant shall fail to provide Landlord with counsel approved by Landlord and pay the expenses thereof, Tenant shall pay all costs and reasonable attorneys’ fees and expenses in connection with such litigation (including fees and expenses incurred in connection with any appellate proceedings).
(e) If Tenant shall fail to pay when due any Basic Rent, additional rent or other sum required to be paid by Tenant hereunder, Landlord shall be entitled to collect from Tenant as additional rent and Tenant shall pay to Landlord, in addition to such Basic Rent, additional rent or other sum, interest on the delinquency equal to the Late Rate from the date due until paid. The Late Rate shall be the lesser of (i) fifteen percent (15%) per annum or (ii) the maximum rate permitted by applicable law. In addition to all other remedies Landlord has hereunder, if Tenant shall fail to pay any Basic Rent, additional rent or other sum, as and when required to be paid by Tenant hereunder prior to the expiration for the period of payment pursuant to subsection 7.01(a)(i), Landlord shall be entitled to collect from Tenant, and Tenant shall pay to Landlord, as additional rent, a late payment charge in an amount equal to five percent (5%) of the amount shown in the notice as unpaid.
ARTICLE VIII
Section 8.01 Notices and Other Instruments. All notices, offers, consents and other instruments given pursuant to this Lease shall be in writing and shall be validly given when hand delivered or sent by a courier or express service guaranteeing overnight delivery or by electronic mail transmission, with original being promptly sent as otherwise provided above, addressed as follows:
If for Tenant: Commercial Vehicle Group, Inc.
7800 Walton Parkway
7800 Walton Parkway
New Albany, Ohio 43054
Attention: Legal Department
E-Mail: legal@cvgrp.com
Attention: Legal Department
E-Mail: legal@cvgrp.com
with a copy to: Steptoe & Johnson PLLC
707 Virginia Street, East, Suite 1700
Charleston, West Virginia 25301
Attention: H. Hampton Rose, IV
E-Mail: hampton.rose@steptoe-johnson.com
707 Virginia Street, East, Suite 1700
Charleston, West Virginia 25301
Attention: H. Hampton Rose, IV
E-Mail: hampton.rose@steptoe-johnson.com
If for Landlord: 200 National LLC
10275 W. Higgins Rd., Suite 810
Rosemont, Illinois 60018
10275 W. Higgins Rd., Suite 810
Rosemont, Illinois 60018
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Attention: Michael W. Brennan
E-Mail: mbrennan@brennanllc.com
with a copy to: Brennan Investment Group
10275 W. Higgins Rd., Suite 810
Rosemont, Illinois 60018
Attention: Legal Department
E-Mail: legal@brennanllc.com
10275 W. Higgins Rd., Suite 810
Rosemont, Illinois 60018
Attention: Legal Department
E-Mail: legal@brennanllc.com
Landlord and Tenant may from time to time specify, by giving ten (10) days’ advance written notice to each other party, (i) any other address in the United States as its address for purposes of this Lease, and (ii) any other Person in the United States that is to receive copies of notices, offers, consents and other instruments hereunder. Notice under the terms of this Lease shall be deemed delivered, whether or not actually received, upon the earlier of (A) the date of actual receipt by such party, or (B) the day after said notice is either deposited with such overnight delivery service, transmitted by electronic mail transmission, or personally delivered, as applicable, pursuant to the above provisions. Notices hereunder may be delivered by counsel on behalf of a party hereto, and such notice shall have the same effect as if delivered directly by the party hereto.
Section 8.02 Estoppel Certificates; Financial Information.
(a) Tenant will, upon five (5) days’ advance written notice at the request of Landlord or a Mortgagee, execute, acknowledge and deliver to Landlord a certificate of Tenant, stating that (i) this Lease is unmodified and in full force and effect (or, if there have been modifications, that this Lease is in full force and effect as modified, and setting forth such modifications), (ii) the dates to which Basic Rent, additional rent and other sums payable hereunder have been paid, and the applicable amounts thereof, (iii) (A) no default caused by Tenant exists under this Lease, to Tenant’s knowledge, no default exists under this Lease caused by any other party, and no fact or circumstance exists which, with the giving of notice, the passage of time, or both, would constitute a default hereunder, and (B) if any such default, fact or circumstance exists, specifying each such default, fact or circumstance, (iv) whether Tenant continues to occupy and operate the Premises, (v) Tenant has no right of offset against Rent, (vi) Tenant’s representations and warranties set forth in this Lease remain true and correct in all material respects, and (vii) such other information as Landlord or Mortgagee shall reasonably request; provided, that if Tenant is obligated to provide such certificates more than twice in a calendar year, Landlord shall pay to Tenant, on demand, all reasonable, actual, out-of-pocket expenses incurred by Tenant as a result of each additional estoppel request, including reasonable attorneys’ fees and expenses. Any such certificate may be relied upon by any actual or prospective mortgagee, investor or purchaser of the Premises.
(b) Tenant shall deliver to Landlord within ninety (90) days of the close of each fiscal year, annual audited financial statements of Tenant (which, at a minimum, shall include a balance sheet of Tenant and its consolidated subsidiaries, if any, as of the end of such year, a statement of profits and losses of Tenant and its consolidated subsidiaries, if any, for such year and a statement of cash flows of Tenant and its consolidated subsidiaries, if any, for such year, setting forth in each case, in comparative form, the corresponding figures for the preceding fiscal year in reasonable detail and scope) prepared by a firm of independent certified public accountants reasonably approved by Landlord. Tenant shall also furnish to Landlord within thirty (30) days after the end of each quarter unaudited internal financial statements and all other quarterly reports of Tenant (which, at a minimum, shall include a balance sheet of Tenant and its consolidated
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subsidiaries, if any, as of the end of such quarter and statements of profits and losses of Tenant and its consolidated subsidiaries, if any, for such quarter, setting forth in each case, in comparative form, the corresponding figures for the similar quarter of the preceding year in reasonable detail and scope) certified by Tenant’s chief financial officer. Tenant shall also provide to Landlord any other audited financial statements completed by Tenant at any other time. All annual financial statements shall be accompanied (i) by an opinion of said accountants stating that (A) there are no qualifications as to the scope of the audit except as specifically enumerated and (B) the audit was performed in accordance with GAAP, and (ii) by the affidavit of the president or a vice president of Tenant, dated within five (5) days of the delivery of such statement, stating that (1) the affiant knows of no Event of Default, or event which, upon notice or the passage of time or both, would become an Event of Default, which has occurred and is continuing hereunder, or, if any such event has occurred and is continuing, specifying the nature and period of existence thereof and what action Tenant has taken or proposes to take with respect thereto and (2) except as otherwise specified in such affidavit, to the best of such affiant’s knowledge, Tenant has fulfilled all of its obligations under this Lease which are required to be fulfilled on or prior to the date of such affidavit.
(c) Upon an Event of Default, Landlord and its agents and designees may enter upon and examine the Premises and examine the records and books of account and discuss the finances and business with the officers and employees of the Tenant at reasonable times during normal business hours and on reasonable advance written notice. Tenant shall provide the requesting party with copies of any information to which such party would be entitled in the course of a personal visit. Except in the event of emergency, Tenant may designate an employee to accompany Landlord, its agents and designees on such examinations. Tenant will provide, upon Landlord’s reasonable request, all information regarding the Premises, including a current rent roll, an operating statement reflecting all income from subleases and all operating expenses for the Premises. Landlord and its agents and designees may enter upon and examine the Premises and show the Premises to prospective mortgagees and/or purchasers at reasonable times during normal business hours and on reasonable advance written notice.
ARTICLE IX
Section 9.01 No Merger. There shall be no merger of this Lease or of the leasehold estate hereby created with the Landlord’s estate in the Premises by reason of the fact that the same Person acquires or holds, directly or indirectly, this Lease or the leasehold estate hereby created or any interest herein or in such leasehold estate, as well as the Landlord’s estate in the Premises or any interest of Landlord’s in such estate.
Section 9.02 Surrender. Upon the expiration or termination of this Lease, Tenant shall surrender the Premises to Landlord in as good repair and condition as received under Section 2.01(a) except for any damage resulting from Condemnation or Casualty or normal wear and tear not required to be repaired by Tenant. The provisions of this Section shall survive the expiration or other termination of this Lease.
Section 9.03 Time. Time is of the essence with respect to this Lease, and the respective time periods set forth herein.
Section 9.04 Separability; Binding Effect; Governing Law. Each provision hereof shall be separate and independent, and the breach of any provision by Landlord shall not discharge or relieve Tenant from any of its obligations hereunder. Each provision hereof shall be valid and shall be
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enforceable to the extent not prohibited by law. If any provision hereof or the application thereof to any Person or circumstance shall to any extent be invalid or unenforceable, the remaining provisions hereof, 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. All provisions contained in this Lease shall be binding upon, inure to the benefit of and be enforceable by the successors and assigns of Landlord to the same extent as if each such successor and assign were named as a party hereto. All provisions contained in this Lease shall be binding upon the successors and assigns of Tenant and shall inure to the benefit of and be enforceable only by the permitted successors and assigns of Tenant in each case to the same extent as if each successor and assign were named as a party hereto. This Lease shall be governed by and interpreted in accordance with the laws of the state in which the Premises are located.
Section 9.05 Table of Contents and Headings; Internal References. The table of contents and the headings of the various paragraphs and exhibits of this Lease have been inserted for reference only and shall not to any extent have the effect of modifying the express terms and provisions of this Lease. Unless stated to the contrary, any references to any Section, subsection, Exhibit and the like contained herein are to the respective Section, subsection, Exhibit and the like of this Lease.
Section 9.06 Counterparts. This Lease may be executed in two or more counterparts and shall be deemed to have become effective when and only when one or more of such counterparts shall have been executed by or on behalf of each of the parties hereto (although it shall not be necessary that any single counterpart be executed by or on behalf of each of the parties hereto, and all such counterparts shall be deemed to constitute but one and the same instrument) and shall have been delivered by each of the parties to the other.
Section 9.07 Landlord’s Liability. Notwithstanding anything to the contrary provided in this Lease, it is specifically understood and agreed, such agreement being a primary consideration for the execution of this Lease by Landlord, that there shall be absolutely no personal liability on the part of any partner, director, member, officer or shareholder of Landlord, its successors or assigns with respect to any of the terms, covenants and conditions of this Lease, and any liability on the part of Landlord shall be limited solely to Landlord’s interest in the Premises, such exculpation of liability to be absolute and without any exception whatsoever.
Section 9.08 Amendments and Modifications. Except as expressly provided herein, this Lease may not be modified or terminated except by a writing signed by Landlord and Tenant.
Section 9.09 Additional Rent. All amounts other than Basic Rent which Tenant is required to pay or discharge pursuant to this Lease, including the charge provided for by Section 7.03(e) hereof, shall constitute additional rent which shall include all reasonable costs and expenses of Tenant and Landlord which are incurred in connection or associated with (A) the use, occupancy, possession, operation, condition, design, construction, maintenance, alteration, repair or restoration of any of the Premises, (B) the performance of any of Tenant’s obligations under this Lease, (C) the prosecution, defense or settlement of any litigation involving or arising from any of the Premises or this Lease, (D) the enforcement by Landlord, its successors and assigns, of any of its rights under this Lease, (E) any amendment to or modification of this Lease made at the request of Tenant, (F) costs of Landlord’s counsel incurred in connection with any act undertaken by Landlord (or its counsel) at the request of Tenant, or incurred in connection with any act of Landlord performed on behalf of Tenant pursuant to this Lease.
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Section 9.10 Consent of Landlord. Except as specifically set forth in this Lease, all consents and approvals to be granted by Landlord shall not be unreasonably withheld or delayed, and Tenant’s sole remedy against Landlord for the failure to grant any consent shall be to seek injunctive relief. In no circumstance will Tenant be entitled to damages with respect to the failure to grant any consent or approval.
Section 9.11 Quiet Enjoyment. Landlord agrees that, subject to the rights of Landlord under this Lease, Tenant shall hold and enjoy the Premises during the term of this Lease, free from any hindrance or interference from Landlord or any party claiming by, through or under Landlord.
Section 9.12 Holding Over. If Tenant remains in possession of the Premises, or any part thereof, after the expiration or other termination of the Term, without Landlord’s express written consent, Tenant shall be guilty of an unlawful detention of the Premises and shall be liable to Landlord for damages for use of the Premises during the period of such unlawful detention at a rate equal to two (2) times the Basic Rent and all other amounts which would be payable during the Term hereof (collectively, “Holdover Rent”), plus any consequential damages suffered by Landlord. In the event of such unlawful detention, Tenant shall indemnify and hold Landlord harmless from and against any and all claims, suits, proceedings, losses, damages, liabilities, costs and expenses, including attorneys’ fees and disbursements, asserted against or incurred by Landlord, as a result of such unlawful detention. Notwithstanding the foregoing, Landlord shall be entitled to such other remedies and damages provided under this Lease or at law or in equity.
Section 9.13 Compliance with Terrorism Laws. Tenant represents and warrants that neither Tenant nor any Person controlling Tenant (i) is included on any Government List (as hereinafter defined); (ii) has been determined by competent authority to be subject to the prohibitions contained in Presidential Executive Order No. 133224 (September 23, 2001) or in any enabling or implementing legislation or other Presidential Executive Orders in respect thereof; (iii) has been previously indicted for or convicted of any felony involving a crime or crimes of moral turpitude or for any offense under the criminal laws against terrorists, the criminal laws against money laundering, the Bank Secrecy Act, as amended, the Money Laundering Control Act of 1986, as amended, or the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorists (USA PATRIOT ACT) Act of 2001, Public Law 107-56 (October 26, 2001), as amended; or (iv) to Tenant’s knowledge, is currently under investigation by any governmental authority for alleged criminal activity. For purposes of this Lease, the term “Government List” means (1) the Specialty Designated Nationals and Blocked Persons Lists maintained by the Office of Foreign Assets Control, United States Department of the Treasury (“OFAC”), (2) the Denied Persons List and the Entity List maintained by the United States Department of Commerce, (3) the List of Terrorists and List of Disbarred Parties maintained by the United States Department of State, (4) any other list of terrorists, terrorist organizations or narcotics traffickers maintained pursuant to any of the lists, laws, rules and regulations maintained by OFAC pursuant to any authorizing statute, Executive Order or regulation, (5) any other similar list maintained by the United States Department of State, the United States Department of Commerce or any other governmental authority or pursuant to any Executive Order of the President of the United States of America and (6) any list or qualification of “Designated Nationals” as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515, as all such Government Lists may be updated from time to time.
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Section 9.14 Subordination and Attornment.
(a) Subordination to Mortgages. Landlord shall be free to convey the Premises or any part thereof or interest therein, and to collaterally assign or pledge its interest in the Lease and as security for any financing to which Landlord and/or its Affiliates are party. This Lease and Tenant’s interest herein are and shall be subject and subordinate to each and every mortgage, assignment or pledge (each, a “Mortgage”) now existing or made subsequent to the date hereof and which cover any part of the Premises or the Lease, and to all renewals, modifications, replacements, consolidations and extensions thereof and to any and all advances made thereunder and the interest thereon. Such subordination shall be effective automatically and without the need for further documentation, but, if requested by the holder of any such Mortgage (a “Mortgagee”), Tenant shall, within ten (10) days of receipt of same, execute, acknowledge and deliver any and all documents and instruments confirming such subordination of this Lease and Tenant’s interest herein as the Mortgagee shall require, including a subordination, non-disturbance and attornment provision on Mortgagee’s form; provided, that if Tenant is obligated to provide such subordination more than twice in a calendar year, Landlord shall pay to Tenant, on demand, all reasonable, actual, out-of-pocket expenses incurred by Tenant as a result of each additional subordination request, including reasonable attorneys’ fees and expenses. In the event that a Mortgagee pursuant to a Mortgage made prior to the delivery of this Lease shall request that this Lease have priority over such Mortgage, and such Mortgage covers any part of the Premises, and Landlord consents thereto, this Lease shall have priority over said Mortgage and all renewals, modifications, replacements, consolidations and extensions thereof and all advances made thereunder and the interest thereon, and Tenant shall, within ten (10) days of receipt of same, execute, acknowledge and deliver any and all documents and instruments confirming the priority of this Lease.
(b) Subordination to Leases. This Lease and Tenant’s interest herein are and shall be subject and subordinate to each and every underlying lease now existing or made subsequent to the date hereof and which covers any part of the Premises, and to all renewals, modifications, replacements and extensions thereof. Such subordination shall be effective automatically and without the need for further documentation but, upon request of Landlord, Tenant shall, within ten (10) days of receipt of same, execute, acknowledge and deliver any and all documents and instruments subordinating this Lease and Tenant’s interest herein.
(c) Attornment. In the event of (i) a transfer of Landlord’s interest in the Premises, (ii) the termination of any underlying lease of premises which include the Premises or (iii) the purchase of the Premises or Landlord’s interest therein in a foreclosure sale or by deed in lieu of foreclosure under any mortgage or pursuant to a power of sale contained in any mortgage, then in any of such events Tenant shall, at the request of such Transferee, attorn to and recognize the Transferee, as “Landlord” under this Lease for the balance then remaining of the Term, and thereafter this Lease shall continue as a direct Lease between such Person, as “Landlord”, and Tenant, as “Tenant”, and such Person shall not be liable for any act or omission of Landlord prior to such Lease termination or prior to such Person’s succession to title, nor be subject to any offset, defense or counterclaim accruing prior to such Lease termination or prior to such Person’s succession to title, nor be bound by any payment of Basic Rent or additional rent prior to such Lease termination or prior to such Person’s succession to title for more than one month in advance or by any modification of this Lease or any waiver, compromise, release or discharge of any obligation of Tenant hereunder unless such modification, waiver, compromise, release or discharge shall have been specifically consented to in writing by the Landlord under such underlying lease or the mortgagee under said
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mortgage, or for return of the security deposit, if any, (unless actually received by such Person). In consideration for such attornment, Tenant shall be entitled not to be disturbed in its possession of the Premises in accordance with the terms and conditions of this Lease, so long as no Event of Default occurs hereunder beyond any applicable notice and cure periods.
(d) Notices to Mortgagees. Tenant shall send to each mortgagee of any mortgage covering any part of the Premises copies of all notices that Tenant sends to Landlord; such notices to said mortgagee shall be sent concurrently with the sending of the notices to Landlord and in the same manner as notices are required to be sent pursuant to Section 8.01 hereof. Tenant will accept performance of any provision of this Lease by such mortgagee as performance by, and with the same force and effect as though performed by, Landlord. If any act or omission of Landlord would give Tenant the right, immediately or after lapse of a period of time, to cancel or terminate this Lease, or to claim a partial or total eviction, Tenant shall not exercise such right until (i) Tenant gives notice of such act or omission to Landlord and to each such mortgagee, and (ii) a reasonable period of time for remedying such act or omission elapses following the time when such mortgagee becomes entitled under such mortgage to remedy same (which reasonable period shall in no event be less than the period to which Landlord is entitled under this Lease or otherwise, after similar notice, to effect such remedy and which reasonable period shall take into account such time as shall be required to institute and complete any foreclosure proceedings).
Section 9.15 Lender Protections Notwithstanding anything to the contrary in this Lease or any Mortgage, any party that becomes owner of the Premises as a result of (x) foreclosure under any Mortgage, (y) any other exercise by any Mortgagee of rights and remedies (whether under any Mortgage or under applicable law, including bankruptcy law) as holder of a Mortgage, or (z) delivery by Landlord to a Mortgagee (or its designee or nominee) of a deed or other conveyance of Landlord’s interest in the Premises in lieu of any of the foregoing (“Successor Landlord”), shall not be liable for or bound by any of the following matters:
(a) any right of Tenant to any offset, defense, claim, counterclaim, reduction, deduction, or abatement against Tenant’s payment of rent or performance of Tenant’s other obligations under this Lease, arising (whether under this Lease or under applicable law) from Landlord’s breach or default under this Lease (“Offset Right”) that Tenant may have against Landlord or any other party that was Landlord under this Lease at any time before the occurrence of any attornment by Tenant (“Former Landlord”) relating to any event or occurrence before the date of attornment, including any claim for damages of any kind whatsoever as the result of any breach by Former Landlord that occurred before the date of attornment. The foregoing shall not limit either (x) Tenant’s right to exercise against Successor Landlord any Offset Right otherwise available to Tenant because of events occurring after the date of attornment or (y) Successor Landlord’s obligation to correct any conditions that existed as of the date of attornment and violate Successor Landlord’s obligations as Landlord under this Lease;
(b) any obligation with respect to any security deposited with Former Landlord, unless such security was actually delivered to Mortgagee;
(c) to commence or complete any initial construction of improvements in the Premises or any expansion or rehabilitation of existing improvements thereon;
(d) to reconstruct or repair improvements following a fire, casualty or condemnation;
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(e) any offset, defense, claim, counterclaim, reduction, deduction, or abatement arising from representations and warranties related to Former Landlord;
(f) any modification or amendment of the Lease, or any waiver of the terms of the Lease, made without Mortgagee’s written consent;
(g) any consensual or negotiated surrender, cancellation, or termination of this Lease, in whole or in part, agreed upon between Landlord and Tenant, unless effected unilaterally by Tenant pursuant to the express terms of the Lease;
(h) any payment of rent that Tenant may have made to Former Landlord more than thirty (30) days before the date such rent was first due and payable under the Lease with respect to any period after the date of attornment other than, and only to the extent that, the Lease expressly required such a prepayment; and
(i) to pay Tenant any sum(s) that any Former Landlord owed to Tenant unless such sums, if any, shall have been actually delivered to Mortgagee by way of an assumption of escrow accounts or otherwise.
Section 9.16 Disclaimer of Purchase Rights. Nothing in this Lease is intended or shall operate to grant to Tenant any right of first refusal, right of first offer, purchase option, or similar right to elect to purchase or acquire the Premises or any portion thereof, and Tenant hereby expressly waives any and all such rights.
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Section 9.17 Security Deposit.
(a) Tenant will deposit or cause to be deposited with Landlord or Mortgagee, as Landlord shall designate, on or before the date hereof, $1,531,833.33, as a “Security Deposit” for its full and faithful performance of the terms of this Lease, it being expressly understood that such Security Deposit shall not be considered an advance payment of any Basic Rent, additional rent or other sums payable under this Lease or a measure of Landlord’s damages in case of an Event of Default. Payment of said Security Deposit shall be satisfied by Tenant’s deposit of cash or a Letter of Credit in said amount. Tenant shall have the right to freely substitute cash for a Letter of Credit or vice versa, and if paid in cash, any interest earned shall remain as an additional Security Deposit. If Landlord transfers its interest in the Premises during the Term to a Transferee who assumes Landlord’s obligations hereunder and to whom the Security Deposit is transferred, Landlord may assign the Security Deposit to the Transferee and, thereafter, Landlord shall have no further liability for the return of such Security Deposit to Tenant. If the Security Deposit is in the form of a Letter of Credit, Tenant shall execute and deliver, within five (5) days after request therefor by Landlord, upon any and all documents necessary to transfer the Letter of Credit to the Transferee. For the purposes herein, “Letter of Credit” shall mean an irrevocable standby letter of credit issued to Landlord by a financially sound national banking association or state chartered bank having assets in excess of $50,000,000,000 and otherwise reasonably acceptable to Landlord, the proceeds of which shall be available to Landlord without the need for Landlord to satisfy any requirements or conditions whatsoever other than delivery of (a) the original Letter of Credit along with Landlord’s sight draft to the issuing institution with reference to the appropriate letter of credit number for the Letter of Credit, as set forth therein and (b) (i) a certificate signed by Landlord certifying that an Event of Default has occurred and is continuing under the Lease, or (ii) a certificate signed by Landlord certifying that Tenant has failed to renew the Letter of Credit at least thirty (30) days prior to its stated expiration date. The Letter of Credit shall be valid for an initial period of one (1) year from and after the date of its issuance and, by its express terms, shall provide (i) that its term shall automatically be extended for successive one (1) year periods unless at least thirty (30) days prior to the expiration of the initial one year term or any one year extension (as applicable) the issuer provides Landlord with written notification that it will not be extended, and (ii) that Landlord may assign (whether by way of outright or collateral assignment) all or any portion of its interest in the Letter of Credit to Mortgagee or any other Person (including any third party purchaser).
(b) Following an Event of Default, Landlord may use, apply or retain the whole or any part of the Security Deposit to the extent required for the payment of any Basic Rent and additional rent, or any other sum as to which Tenant is in default, or for any sum which Landlord may expend or may be required to expend by reason of Tenant’s Event of Default in respect of any of the terms, covenants and conditions of this Lease, including but not limited to, any damages or deficiency in the reletting of the Premises, whether such damages or deficiency accrued before or after summary proceedings or other re-entry by Landlord. In the case of every such use, application or retention, Tenant shall, within five (5) days after demand, pay to Landlord, or restore the amount of the Letter of Credit by, the sum so used, applied or retained which shall be added to the Security Deposit so that the same shall be replenished to its former amount.
(c) Beginning as of January 1, 2028, Tenant shall have the right to request by written notice to Landlord (a “Reduction Notice”), a reduction in the Security Deposit to $117,833.33, provided that (1) Tenant’s EBITDA for the previous two (2) calendar years as shown on the financial statements delivered pursuant to Section 8.02(b) is greater than $25,000,000, (2)
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Tenant’s Leverage for the previous two (2) calendar years as shown on the financial statements delivered pursuant to Section 8.02(b) has not been greater than four (4), and (3) there exists no Event of Default under this Lease. If Tenant provides Landlord with a Reduction Notice and the supporting financial statements pursuant to Section 8.02(b) and Tenant is entitled to reduce the Security Deposit as provided herein, within fifteen (15) days after Landlord’s receipt of the Reduction Notice, Landlord shall refund Tenant the Security Deposit, if the Security Deposit is held in the form of cash, or return the Letter of Credit to Tenant, if the Security Deposit is held in the form of a letter of credit.
Section 9.18 Short Form Memorandum of Lease. Upon Landlord’s or Tenant’s request, the parties shall record a “short form” Memorandum of Lease identifying the Term granted to Tenant by this Lease, and any other terms which may be required by applicable Legal Requirements. Any recording costs associated with the memorandum or short form of this Lease shall be borne by Tenant. Upon the expiration or earlier termination of this Lease, Tenant shall promptly execute and deliver to Landlord an instrument, in recordable form, wherein Tenant acknowledges the expiration or earlier termination of this Lease. Upon transfer or conveyance of the Premises by Landlord, Tenant agrees to execute an amendment to the memorandum indicating the change of Landlord.
Section 9.19 Brokers. Landlord and Tenant mutually represent and warrant to each other that it dealt with no real estate brokers in the transactions contemplated by this Lease, and that no brokerage fees, commissions, or other remuneration of any kind are due in connection herewith. Landlord shall forever indemnify and hold harmless Tenant against and in respect of any and all claims, losses, liabilities and expenses, including reasonable attorney’s fees and court costs, which Tenant may incur on account of any claim by any broker or agent or other Person on the basis of any arrangements or agreements made or alleged to have been made by or on behalf of Landlord in respect to the transactions herein contemplated. Tenant shall forever indemnify and hold harmless Landlord against and in respect of any and all claims, losses, liabilities and expenses, including reasonable attorney’s fees and court costs, which Landlord may incur on account of any claim by any broker or agent or other Person on the basis of any arrangements or agreements made or alleged to have been made by or on behalf of Tenant in respect to the transactions herein contemplated. The provisions of this Section shall survive expiration or termination of this Lease.
Section 9.20 No Partnership. Nothing herein contained shall be deemed or construed either by the parties hereto, or by a third party, to create a relationship between the parties of principal and agent, partnership, or joint venture. None of computation of rent, or any other provision contained herein, or any acts of the parties hereto, shall be deemed to create any relationship between the parties hereto other than the relationship of landlord and tenant.
Section 9.21 No Construction Against Drafter. Each of the parties hereto acknowledges that it is sophisticated and experienced in transactions of the nature contemplated hereby and that it has been represented by counsel of its choosing in connection herewith; accordingly, each party hereto waives to the fullest extent permitted by law the application of any law or rule of construction requiring that this Lease be construed or interpreted against the drafting party or in favor of the non-drafting party.
Section 9.22 Security Interest and Security Agreement. This Lease shall also create a security interest in, and Tenant hereby grants to Landlord a security interest in, all sums on deposit with Landlord (or Landlord’s Mortgagee, as applicable) pursuant to the provisions of this Lease, including the Tax Escrow Payments, the Insurance Escrow Payments, and the Security Deposit (said property, funds and accounts are hereinafter referred to collectively as the “Collateral”). This Lease
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constitutes a security agreement between Tenant and Landlord with respect to the Collateral in which Landlord is granted a security interest hereunder, and, cumulative of all other rights and remedies of Landlord hereunder, Landlord shall have all of the rights and remedies of a secured party under the Uniform Commercial Code. “Uniform Commercial Code” means the Uniform Commercial Code as now or hereafter in effect in the state where the Premises is located; provided that, in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of, or remedies with respect to, the Landlord’s security interest in any Collateral is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction other than such state, the term “Uniform Commercial Code” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority or remedies and for purposes of definitions related to such provisions. Tenant hereby agrees to execute and deliver on demand and hereby irrevocably constitutes and appoints Landlord the attorney-in-fact of Tenant to execute and deliver and, if appropriate, to file with the appropriate filing officer or office such security agreements, financing statements, continuation statements or other instruments as Landlord may request or require in order to impose, perfect or continue the perfection of the lien or security interest created hereby. Tenant hereby authorizes Landlord at any time and from time to time to file any initial financing statements, amendments thereto and continuation statements with or without the signature of Tenant as authorized by applicable law, as applicable to all or part of the Collateral. For purposes of such filings, Tenant agrees to furnish any information requested by the Landlord promptly upon request therefor by Landlord. Tenant also ratifies its authorization for the Landlord to have filed any like initial financing statements, amendments thereto or continuation statements, if filed prior to the date of this Lease. Tenant agrees to furnish Landlord with notice of any change in the name, identity, organizational structure, residence, state of incorporation, state of organization or state of formation or principal place of business or mailing address of Tenant within ten (10) days of the effective date of any such change. Upon the occurrence of any Event of Default, Landlord shall have the rights and remedies as prescribed in this Lease, or as prescribed by general law, or as prescribed by any applicable Uniform Commercial Code, all at Landlord’s election.
Section 9.23 Waiver of Trial by Jury. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH OF TENANT AND LANDLORD (A) AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS LEASE OR THE RELATIONSHIP BETWEEN THE PARTIES AS TENANT AND LANDLORD THAT IS TRIABLE OF RIGHT BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY TENANT AND LANDLORD, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.
Section 9.24 Representations and Warranties of Tenant. To induce Landlord to execute, deliver and perform its obligations under this Lease, Tenant hereby represents and warrants to Landlord on and as of the date hereof as follows:
(a)Tenant is duly organized or formed, validly existing, and in good standing under the laws of the state of its formation and is duly authorized to transact business in under the laws of the state where the Premises is located.
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(b)Tenant has full capacity, right, power and authority to execute, deliver and perform this Lease and all documents to be executed by Tenant pursuant hereto; all required action and approvals therefore have been duly taken and obtained, and the individuals signing this Lease and all other documents executed pursuant hereto on behalf of Tenant are duly authorized to sign the same on Tenant’s behalf and to bind Tenant thereto; and to the best of Tenant’s knowledge, Tenant’s execution of and performance under this Lease shall not constitute a breach of any agreement, understanding, order, judgment or decree, written or oral, to which Tenant is a party, or to which any part of the Premises may be subject, or by which Tenant may be bound, and to the best of Tenant’s knowledge shall not constitute a violation of any provision of any Legal Requirement, to which Tenant or the Premises are or may become subject; and this Lease and all documents to be executed pursuant hereto by Tenant are and shall be binding upon and enforceable against Tenant in accordance with their respective terms.
(c)Tenant is not a foreign corporation, foreign partnership, foreign trust or foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations).
(d)There are no contracts, agreements, leases, licenses, invoices, bills or understandings of any nature, written or oral, formal or informal to which Tenant is a party or otherwise bound which Landlord, upon becoming owner of the Premises, will be required to assume or pay or to which Landlord, as a consequence of entering into this Lease, may become bound without Landlord’s express and prior written consent.
(e)No petition in bankruptcy has been filed by or against Tenant, and there are no claims, causes of action, proceedings, litigation or investigations pending or, to the best of Tenant’s knowledge, threatened against or affecting Tenant or the Premises (including disputes with governmental authorities, utilities, contractors, adjoining land owners), and no basis known to Tenant for the same, which, if decided adversely, would affect Tenant’s ability to carry out the transaction contemplated by this Lease or would interfere with or prevent the use of the Premises for its industrial purposes.
Section 9.25 Construction. As used in this Lease, the phrase “to the best of Tenant’s knowledge” means with respect to any statement following such phrase that to the date hereof no information has come to the attention of any of Tenant’s agents in the normal course of performing management responsibilities for the Premises, or otherwise, and after reasonable independent investigation having been made by Tenant or one or more of Tenant’s agents, which would cause any of Tenant’s agents to believe that such statement is not true and correct. Tenant shall defend, indemnify and hold Landlord harmless from and against any and all damage, cost, liability and expense resulting from any material breach of any of the representations and warranties set forth in this Lease. As used in this Lease, the words “include”, “includes”, “including” and other similar words based on the root “include”, are deemed to be followed by the words “without limitation.”
[Signatures of Landlord and Tenant Follow on Next Pages]
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IN WITNESS WHEREOF, the parties to this Agreement have executed this Lease to be executed as of the Commencement Date.
LANDLORD:
200 NATIONAL LLC, an Illinois limited liability company
By: /s/ Michael Brennan
Name: Michael W. Brennan
Title: Manager
TENANT:
COMMERCIAL VEHICLE GROUP, INC., a Delaware corporation
By: /s/ Aneezal Mohamed
Name: Aneezal H. Mohamed
Its: Secretary
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EXHIBIT A
LEGAL DESCRIPTION
The Land referred to herein below in situated in the County of Monroe, State of Tennessee, and described as follows:
Situated in the Second Civil District of Monroe County, Tennessee, and described as follows:
To find the Point of Beginning, begin at a point in the 820.0 contour of Tellico Lake, said point being in the North line of the East Tennessee Natural Gas Easement, said point also being the Southeast corner of the property now or formerly owned by Sea-Ray Boats, Inc., thence from said point and along the 820.0 contour line South 34 degrees 57 minutes 45 seconds east, a distance of 60.71 feet to a point marked by an iron pin, said point being the Point of Beginning; thence from said Point of Beginning along the Northeastern line of the said Tellico Reservoir Development Agency property also being along the 820.0 contour line, the following courses and distances:
South 34 degrees 57 minutes 45 seconds East, 64.97 feet to a point marked by an iron pin; thence South 11 degrees 19 minutes 47 seconds East, 118.32 feet to a point marked by an iron pin;
thence South 76 degrees 10 minutes 16 seconds East, 78.20 feet to a point marked by an iron pin; thence North 72 degrees 25 minutes 58 seconds East, 72.83 feet to a point marked by an iron pin; thence South 70 degrees 44 minutes 41 seconds East, 43.88 feet to a point marked by an iron pin; thence North 85 degrees 39 minutes 49 seconds East, 80.43 feet to a point marked by an iron pin; thence North 36 degrees 18 minutes 22 seconds East, 49.23 feet to a point marked by an iron pin; thence North 57 degrees 27 minutes 54 seconds East 128.43 feet to a point marked by an iron pin; thence North 82 degrees 00 minutes 32 seconds East, 160.20 feet to a point marked by an iron pin; and thence South 77 degrees 40 minutes 48 seconds East 81.81 feet to a point marked by an iron pin, and being the Southeast corner of the Tellico Reservoir Development Agency property;
thence from said Southeast corner and along the Southern line of the said Tellico Reservoir Development Agency property and the 820.0 contour line the following courses and distances: South 0 degrees 07 minutes 28 seconds East, 72.80 feet to a point marked by an iron pin;
thence South 19 degrees 54 minutes 57 seconds West, 190.36 feet to a point marked by an iron pin; thence South 23 degrees 38 minutes 02 seconds West 203.94 feet to a point marked by an iron pin; thence South 38 degrees 38 minutes 21 seconds West 182.79 feet to a point marked by an iron pin; thence South 49 degrees 56 minutes 07 seconds West 221.72 feet to a point marked by an iron pin; thence South 53 degrees 09 minutes 23 seconds West 236.11 feet to a point marked by an iron pin; thence South 38 degrees 42 minutes 24 seconds West 142.89 feet to a point marked by an iron pin; thence South 33 degrees 13 minutes 50 seconds West 446.06 feet to a point marked by an iron pin; thence South 14 degrees 27 minutes 33 seconds West 145.98 feet to a point marked by an iron pin; thence South 44 degrees 51 minutes 06 seconds West 216.26 feet to a point marked by an iron pin; thence South 16 degrees 06 minutes 24 seconds West 159.03 feet to a point marked by an iron pin; thence South 81 degrees 13 minutes 04 seconds West 234.95 feet to a point marked by an iron pin; thence South 52 degrees 42 minutes 10 seconds West 100.37 feet to a point marked by an iron pin; thence South 16 degrees 18 minutes 37 seconds West 204.68 feet to a point, said point being marked by an iron pin and being the Southwest corner of the said Tellico Reservoir development Agency property; thence in a Northwestward direction and leaving the 820.0 contour line, North 40 degrees, 51 minutes 46 seconds West a distance of 1001.72 feet to an iron pin, said iron pin being Northwest corner of the said Tellico
Reservoir Development agency property, and being in the South line of the East Tennessee Natural Gas Company right of way;
thence along said right of way of East Tennessee Natural gas Company Easement, the following courses and distances:
North 49 degrees 08 minutes 14 seconds East 1288.63 feet to a point marked by an iron pin;
thence North 48 degrees 50 minutes 50 seconds East, 292.43 feet to a point marked by an iron pin;
thence North 47 degrees 39 minutes 20 seconds East, 303.38 feet to a point marked by an iron pin; thence North 33 degrees 42 minutes 39 seconds East, 126.63 feet to a point marked by an iron pin; thence North 20 degrees 28 minutes 57 seconds East, 52.18 feet to the Point of Beginning.
EXHIBIT B
BASIC RENT SCHEDULE
The Basic Rent for the Term shall be as follows:
Lease Year | Dates | Annual Rent | Monthly Rent | ||||||||
1 | Commencement Date through the 12th full calendar month | $1,414,000.00 | $117,833.33 | ||||||||
2 | 13th month through 24th month | $1,463,490.00 | $121,957.50 | ||||||||
3 | 25th month through 36th month | $1,514,712.15 | $126,226.01 | ||||||||
4 | 37th month through 48th month | $1,567,727.08 | $130,643.92 | ||||||||
5 | 49th month through 60th month | $1,622,597.52 | $135,216.46 | ||||||||
6 | 61st month through 72nd month | $1,679,388.44 | $139,949.04 | ||||||||
7 | 73rd month through 84th month | $1,738,167.03 | $144,847.25 | ||||||||
8 | 85th month through 96th month | $1,799,002.88 | $149,916.91 | ||||||||
9 | 97th month through 108th month | $1,861,967.98 | $155,164.00 | ||||||||
10 | 109th month through 120th month | $1,927,136.86 | $160,594.74 | ||||||||
11 | 121st month through 132nd month | $1,994,586.65 | $166,215.55 | ||||||||
12 | 133rd month through 144th month | $2,064,397.18 | $172,033.10 | ||||||||
13 | 145th month through 156th month | $2,136,651.08 | $178,054.26 | ||||||||
14 | 157th month through 168th month | $2,211,433.87 | $184,286.16 | ||||||||
15 | 169th month through 180th month | $2,288,834.05 | $190,736.17 | ||||||||
16 | 181st month through 192nd month | $2,368,943.25 | $197,411.94 | ||||||||
17 | 193rd month through 204th month | $2,451,856.26 | $204,321.36 | ||||||||
18 | 205th month through 216th month | $2,537,671.23 | $211,472.60 | ||||||||
19 | 217th month through 228th month | $2,626,489.72 | $218,874.14 | ||||||||
20 | 229th month through 240th month | $2,718,416.86 | $226,534.74 | ||||||||
EXHIBIT C
SEVERABLE PROPERTY
Severable Property shall include all apparatus, personal property, trade fixtures, inventory, equipment, machinery, fittings, furniture, furnishings, chattel, materials and supplies located on and used in the Premises or related to Tenant’s business, including mainframe computers, removable kitchen equipment and telephone and similar systems and articles of personal property of every kind and nature whatsoever, and any additions, replacements, accessions and substitutions thereto or therefor.
Severable Property shall not include the Improvements or any fixtures permanently attached to the Improvements.
EXHIBIT 31.1
302 CERTIFICATION
I, James R. Ray, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Commercial Vehicle Group, Inc. and Subsidiaries;
2.Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.Based on my knowledge, the financial statements, and other information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and audit committee of the registrant’s board of directors (or persons performing the equivalent function):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
May 5, 2026
| /s/ James R. Ray | ||
| James R. Ray | ||
| President and Chief Executive Officer | ||
| (Principal Executive Officer) | ||
EXHIBIT 31.2
302 CERTIFICATION
I, Angela O'Leary, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Commercial Vehicle Group, Inc. and Subsidiaries;
2.Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.Based on my knowledge, the financial statements, and other information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and audit committee of the registrant’s board of directors (or persons performing the equivalent function):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
May 5, 2026
/s/ Angela M. O'Leary | ||
| Angela M. O'Leary | ||
| Interim Chief Financial Officer | ||
| (Principal Financial Officer) | ||
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Commercial Vehicle Group, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James R. Ray, President and Chief Executive Officer (Principal Executive Officer) of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
May 5, 2026
| /s/ James R. Ray | ||
| James R. Ray | ||
| President and Chief Executive Officer | ||
| (Principal Executive Officer) | ||
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Commercial Vehicle Group, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Angela O'Leary, Interim Chief Financial Officer (Principal Financial Officer) of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
May 5, 2026
/s/ Angela M. O'Leary | ||
| Angela M. O'Leary | ||
| Interim Chief Financial Officer | ||
| (Principal Financial Officer) | ||