AGREEMENT OF LEASE
AGREEMENT OF LEASE dated as of _____, 199_ (as the same may be amended or
otherwise modified from time to time, the "Lease") by and between REVLON
CONSUMER PRODUCTS CORPORATION, a Delaware corporation ("Lessor"), having an
office at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX, and THE COSMETIC CENTER, INC., a
Delaware corporation("Lessee"),having an office at ____________________________.
1. Certain Definitions. The terms defined in this PARAGRAPH shall, for all
purposes of this Lease, have the meanings specified herein, unless the context
otherwise requires.
1.1 "Building": Commonly described as being located at 0000 Xxxxx 00, xx
xxx Xxxxxxxx xx Xxxxxxx, Xxxxxx of Monmouth, State of New Jersey. "Building"
shall include any adjacent parking structures, if any, used in connection with
the Building.
1.2 "Industrial Center": The Premises, the Building, the Common Areas, the
land upon which the same are located, along with all other buildings and
improvements currently thereon or thereunder, as shown on EXHIBIT A-1.
1.3 "Premises": That certain portion of the Building, including all
improvements therein or to be provided by Lessor under the terms of this Lease,
consisting of approximately 15,000 square feet of office space ("Office Space")
and approximately 78,000 square feet of warehouse space ("Warehouse Space"),
totalling approximately 93,000 square feet, as shown on EXHIBIT A hereto.
1.4 "Prime Rate": The fluctuating rate of interest per annum published in
the Wall Street Journal, Eastern Edition (or in any similar financial
periodical, as Lessor, in its sole discretion may choose in the event that the
Wall Street Journal ceases to publish a "Prime Rate"), from time to time as
being the "Prime Rate" of interest. Any change in the Prime Rate shall be
effective as of the date such published Prime Rate changes.
2. Premises, Parking and Common Areas.
2.1 Premises. Subject to the terms and conditions of this Lease, including
the Rules and Regulations, Lessor hereby leases to Lessee, and Lessee hereby
leases from Lessor, for the Term, the Premises.
2.2 Vehicle Parking.
(a) Subject to the Rules and Regulations, and the terms and
conditions of this Lease, Lessee shall be entitled during the Term to use the
unreserved parking spaces in the Industrial Center designated from time to time
by Lessor for parking. The spaces presently so designated are shown on EXHIBIT B
hereto. Lessee shall not use more parking spaces than those so designated. Said
parking spaces shall be used for parking by vehicles no larger than full-size
passenger automobiles, pick-up trucks or vans, herein called "Permitted Size
Vehicles." Vehicles other than Permitted Size Vehicles shall be parked and
loaded or unloaded as directed by Lessor in the Rules and Regulations.
(a) Lessee shall not permit or allow any vehicles that belong to
or are controlled by Lessee or Lessee's employees, suppliers, shippers,
customers, contractors or invitees to be loaded, unloaded, or parked in areas
other than those designated by Lessor for such activities.
(b) If Lessee commits, permits or allows any of the prohibited
activities described in the Lease or the Rules and Regulations, then Lessor
shall have the right, without notice, in addition to such other rights and
remedies that it may have, to remove or tow away the vehicle involved and charge
the cost to Lessee, which cost shall be immediately payable upon demand by
Lessor.
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2.3 Common Areas-Definition. "Common Areas" means all areas
and facilities outside the Premises and within the exterior boundary line of the
Industrial Center and all interior utility raceways within the Premises that are
provided and designated by Lessor for the general non-exclusive use of Lessor,
Lessee and other lessees or users of the Industrial Center and their respective
employees, suppliers, shippers, customers, contractors and invitees, including
parking areas, loading and unloading areas, trash areas, roadways, sidewalks,
walkways, parkways, driveways and landscaped areas. The Common Areas are shown
on EXHIBIT A-1.
2.4 Common Areas-Lessee's Rights. Lessor hereby grants to
Lessee, for the benefit of Lessee and its employees, suppliers, shippers,
contractors, customers and invitees, during the Term, the non-exclusive right to
use, in common with others entitled to such use, the Common Areas as they exist
from time to time, subject to any rights, powers, and privileges reserved by
Lessor under the terms hereof or under the Rules and Regulations. Under no
circumstances shall the right herein granted to use the Common Areas be deemed
to include the right to store any property, temporarily or permanently, in the
Common Areas. Any such storage shall be permitted only by the prior written
consent of Lessor or Lessor's designated agent, which consent may be revoked at
any time. In the event that any unauthorized storage shall occur then Lessor
shall have the right, without notice, in addition to such other rights and
remedies that it may have, to remove the property and charge the cost of such
removal to Lessee, which cost shall be immediately payable by Lessee upon demand
by Lessor.
2.5 Common Areas-Rules and Regulations. Lessor or such other
person(s) as Lessor may appoint shall have the exclusive control and management
of the Common Areas and shall have the right to establish, modify, amend and
enforce the Rules and Regulations. Lessee agrees to abide by and conform to the
Rules and Regulations, and to cause its agents, employees, suppliers, shippers,
customers, contractors and invitees to so abide and conform.
2.6 Common Areas-Changes. Lessor shall have the right, in
Lessor's sole discretion, from time to time:
(a) To make changes to the Building interior and
exterior and/or to the Common Areas, including, without limitation, changes in
the location, size, shape and number of driveways, entrances, parking spaces,
parking areas, loading and unloading areas, ingress, egress, direction of
traffic, landscaped areas, walkways and utility raceways; provided such changes
do not materially adversely affect Lessee's use of the Premises.
(b) To close temporarily any of the Common Areas for
maintenance or other purposes so long as reasonable access to the Premises
remains available;
(c) To designate other land outside the boundaries of
the Industrial Center to be a part of the Common Areas;
(d) To add additional buildings and improvements to
the Common Areas;
(e) To use the Common Areas, to the exclusion of
Lessee, while engaged in making additional improvements, repairs or alterations
to the Industrial Center, or any portion thereof; and/or
(f) To do and perform such other acts and make such
other changes in, to or with respect to the Common Areas and the Industrial
Center as Lessor may, in the exercise of sound business judgment, reasonably
deem to be appropriate.
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3. Term; Commencement Date, Option(s) to Extend.
3.1 Term. The term of this Lease (the "Term") shall, subject
to the remaining provisions of PARAGRAPH 3, commence on the date of this Lease
(such date, the "Commencement Date") and shall end on the last day of the month
which is 60 months after the Commencement Date, or any earlier termination of
this Lease (such earlier date, the "Expiration Date"), as provided in PARAGRAPH
3.3.
3.2 Possession. Lessee acknowledges that its predecessor-in-
interest, Prestige Fragrance and Cosmetics, Inc., a Delaware corporation ("PFC")
has been in possession of the Premises since _________________. Lessee will
continue in possession as PFC's successor by merger, and accepts possession
AS-IS and with all defects, patent and latent.
3.3 Early Termination.
(a) The Lessee shall be entitled to terminate this Lease by
giving Lessor at least sixty (60) days' prior written notice of such termination
("Termination Notice"). If any of the events set forth in PARAGRAPH 3.3(b) shall
occur ("Lessor Termination Events"), the Lessor shall be entitled to terminate
this Lease by giving Lessee a Termination Notice at least one hundred eighty
(180) days prior to the effective date thereof. Any Termination Notice given
under this PARAGRAPH shall specify the effective date of such termination.
Lessee shall not be liable to pay any termination or other fee or expense in
connection with the termination of the Lease under this PARAGRAPH, and, upon
termination of the Lease under this PARAGRAPH, Lessee shall have no further
liability to Lessor under this Lease, except as otherwise provided in this
Lease.
(b) Each of the following shall be a "Lessor Termination
Event" giving Lessor the right but not the obligation to terminate this Lease as
set forth in PARAGRAPH 3.3(a):
(i) The acceptance by Lessor of an offer to lease or
sell the Building to a third party. For purposes hereof, a sale of assets, sale
of stock, merger or other transaction in which control of Lessor or the Building
is to be conveyed to a third party shall constitute a "sale" of the Building.
(ii) The cessation of all or a substantial portion of
the operations of Lessor at the Industrial Center.
(iii) The entry by Lessor into an agreement with a
third party for a change in control of Lessee, or the occurrence of a change in
control of Lessee. A "change in control" of Lessee for purposes of this Lease
shall be deemed to have taken place if (A) Lessor or any of its affiliates no
longer have the power to vote, directly or indirectly, whether through record or
beneficial ownership, a voting trust arrangement, or other contractual
arrangement, a majority of the voting power of the outstanding shares of Lessee,
or (B) all or substantially all of Lessee's assets are sold to any person other
than an affiliate of Lessor. For purposes hereof, a "person" includes an
individual, corporation, partnership, trust, association, joint venture, pool,
syndicate, unincorporated organization, joint stock company, or similar
organization or group acting in concert. A "person" for these purposes shall be
deemed to be a "beneficial owner" as that term is used in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended.
4. Rent.
4.1 Payment of Base Rent; Initial Payment of Base Rent. Except
as may be otherwise expressly provided in this Lease, Lessee shall pay to Lessor
without offset, counterclaim or deduction, the Base Rent and all other rent or
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charges. Lessee shall pay Lessor upon the execution hereof the Base Rent for the
month during which the Commencement Date occurs. Base Rent and all other rent
and charges for any period of the Term which is for less than one full month
shall be prorated based upon the actual number of days of the month involved.
Payment of Base Rent and other charges shall be made to Lessor at its address
stated herein or to such other persons or at such other addresses as Lessor may
designate in writing.
4.2 Amount of Base Rent; Rent Adjustment. The base rent ("Base
Rent") payable during the initial Term of this Lease shall be as set forth
below, and such monthly base rent shall be paid, in advance, on the first day of
each month:
Annual Base Rent Monthly Base Rent
---------------- -----------------
Office Space $ 63,750.00 $ 5,312.50
-------------------- ----------- ----------
Warehouse Space $331,500.00 $27,625.00
-------------------- ----------- ----------
Total Base Rent: $395,250.00 $32,937.00
4.3 Common Area Operating Expenses. In accordance with the
following provisions, Lessee shall pay to Lessor during the Term, in addition to
the Base Rent, Lessee's Share of all Common Area Operating Expenses during each
calendar year (or part thereof) of the Term, in accordance with the following
provisions:
(a) "Lessee's Share" shall mean 17.2 percent (17.2%),
as determined by the square footage of the Premises as compared to the total
leasable square footage of the Industrial Center, which shall be conclusively
presumed to be 540,000 square feet for all purposes of this Lease. Lessor and
Lessee agree that the square footage figures set forth herein are
approximations, are reasonable and are binding upon them. Lessee's Share shall
not be subject to revision except in connection with a change in the size of the
Premises or a change in the space available for lease in the Industrial Center.
(b) "Common Area Operating Expenses" shall mean all
reasonable and customary costs incurred by Lessor relating to the ownership and
operation of the Industrial Center, including, but not limited to, the
following:
(i) The operation, repair and maintenance, in
neat, clean, good order and condition, of
the Industrial Center, or any part
thereof, including but not limited to,
the following:
(aa) The Common Areas, including parking
areas, loading and unloading areas,
trash areas, roadways, sidewalks,
walkways, parkways, driveways,
landscaped areas, striping, bumpers,
irrigation systems, Common Area
lighting facilities, fences and gates,
elevators and roof.
(bb) Exterior signs and any tenant
directories.
(cc) Fire detection and sprinkler systems.
(ii) The cost of water, gas, electricity and
telephone to service the Common Areas.
(iii) Trash disposal, property management and
security services and the costs of any
environmental inspections.
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(iv) Reserves set aside for maintenance and
repair of Common Areas.
(v) The amount of Real Property Taxes to be
paid by Lessor under PARAGRAPH 5 hereof.
(vi) The cost of the premiums for the
insurance policies maintained by Lessor
in respect of the Industrial Center,
including, without limitation, any
policies maintained pursuant to the
provisions of this Lease.
(vii) Any deductible portion of an insured loss
concerning the Building or the Common
Areas.
(viii) Management fees attributable to the
operation of the Industrial Center (not
to exceed 6% of the gross rents payable
by all lessees of the Industrial Center),
including any management fees payable to
an affiliate of Lessor.
(ix) Any other services to be provided by
Lessor to Lessee, and any similar service
which is provided by Lessor to other
lessees of the Industrial Center or any
part thereof and any other expense
elsewhere in this Lease described as a
Common Area Operating Expense.
Notwithstanding anything to the contrary contained in this Lease, the following
shall be excluded from the definition of Operating Expenses:
(i) the overhead and profit increment paid
to Affiliates of Lessor for services relating to the
Building, to the extent that the cost of such
services exceeds competitive costs for such services
rendered by unaffiliated Persons or entities with
similar skill, competence and experience;
(ii) Lessor's general overhead and general
and administrative expenses;
(iii) interest, fines or penalties due to
late payment of Real Estate Taxes or Operating
Expenses;
(iv) financing or mortgage costs, including
payment of the interest on or principal of borrowed
money;
(v) depreciation expense;
(vi) leasing commissions;
(vii) the cost of lessee improvements;
(viii) ground rent;
(ix) legal fees for leasing vacant space in
the Building and for enforcing lessees' leases;
(x) the cost of electricity and other
utility charges for heating, ventilating and
air-conditioning which are separately metered to, and
paid by, other lessees of the Building; and
(xi) the cost of any improvements which, in
accordance generally accepted accounting principles,
are classified as a capital expenditure, subject to
the provisions of PARAGRAPH 8.2(d).
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(c) Any Common Area Operating Expenses and Real
Property Taxes that are specifically attributable to the Building or to any
other building in the Industrial Center or to the operation, repair and
maintenance thereof, shall be allocated entirely to the Building or to such
other building. However, any Common Area Operating Expenses and Real Property
Taxes that are not specifically attributable to the Building or to any other
building or to the operation, repair and maintenance thereof, shall be equitably
allocated by Lessor to all buildings in the Industrial Center.
(d) The inclusion of the improvements, facilities and
services set forth in PARAGRAPH 4.3(b) shall not be deemed to impose an
obligation upon Lessor to either have said improvements or facilities or to
provide those services unless the Industrial Center already has the same, Lessor
already provides the services, or Lessor has agreed elsewhere in this Lease to
provide the same or some of them.
(e) Lessee's Share of any Common Area Operating
Expenses shall be payable by Lessee within thirty (30) days after a statement of
actual expenses is presented to Lessee by Lessor. At Lessor's option, however,
an amount may be estimated by Lessor from time to time in advance of the payment
by Lessee of Lessee's Share of actual annual Common Area Operating Expenses and
the same shall be payable monthly or quarterly, as Lessor shall designate,
during each 12-month period of the Term, on the same day as the Base Rent is due
hereunder. Lessor's estimates shall be reasonable. Lessor shall deliver to
Lessee within ninety (90) days after the expiration of each calendar year a
statement showing Lessee's Share of the actual Common Area Operating Expenses
incurred during the preceding year. If Lessee's payments under this PARAGRAPH
during said preceding year exceed Lessee's Share as indicated on said statement,
Lessee shall be credited the amount of such over-payment, first against the next
Lessee's Share of Common Area Operating Expenses becoming due, and to the extent
of any overage, next against the installment of Base Rent next coming due; or,
if, at the expiration of the Term, there are no additional payments or
installments becoming due, Lessor shall pay to Lessee the amount of such
over-payment within thirty (30) days after delivery by Lessor to Lessee of said
statement. If Lessee's payments under this PARAGRAPH during said preceding year
were less than Lessee's Share as indicated on said statement, Lessee shall pay
to Lessor the amount of the deficiency within ten (10) days after delivery by
Lessor to Lessee of said statement.
5. Real Property Taxes.
5.1 Payment of Taxes. Except as otherwise provided in
PARAGRAPH 5.2, it shall be Lessor's obligation to pay the Real Property Tax
applicable to the Industrial Center, subject to reimbursement by Lessee of
Lessee's Share of such Real Property Taxes in accordance with the provisions of
PARAGRAPH 4.3.
5.2 Additional Improvements. Common Area Operating Expenses
shall not include any Real Property Taxes specified in the tax assessor's
records and work sheets as being caused by additional improvements (in excess of
Building standard and in excess of those improvements currently in the Premises)
placed upon the Industrial Center by other lessees or by Lessor for the
exclusive enjoyment of such other lessees. Notwithstanding PARAGRAPH 5.1 hereof,
Lessee shall, however, pay to Lessor at the time Common Area Operating Expenses
are payable under PARAGRAPH 4.3 the entirety of any increase in any Real
Property Taxes if assessed solely by reason of Alterations, Trade Fixtures or
Utility Installations (in excess of Building standard and in excess of those
improvements currently in the Premises) placed upon the Premises by Lessee or at
Lessee's request.
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5.3 Definition of Real Property Tax. The term "Real Property
Taxes" shall include any form of real estate tax or assessment, general,
special, ordinary or extraordinary, and any license fee, commercial rental tax,
improvement bond or bonds, levy or tax imposed upon the Industrial Center by any
authority having the direct or indirect power to tax, including any city, state
or federal government, or any school, agricultural, sanitary, fire, street,
drainage, or other improvement district thereof, levied against any legal or
equitable interest of Lessor in the Industrial Center or any portion thereof,
Lessor's right to rent or other income therefrom, and/or Lessor's business of
leasing the Premises. The term "Real Property Taxes" shall also include any tax,
fee, levy, assessment or charge of the type described in the preceding sentence,
or any increase therein, imposed by reason of events occurring, or changes in
Applicable Law taking effect, during the Term, including but not limited to a
change in the ownership of the Industrial Center or in the improvements thereon,
the execution of this Lease, or any modification, amendment or transfer thereof,
and whether or not contemplated by the parties. In calculating Real Property
Taxes for any calendar year, the Real Property Taxes for any real estate tax
year shall be included in the calculation of Real Property Taxes for such
calendar year based upon the number of days which such calendar year and tax
year have in common. Notwithstanding anything to the contrary contained in this
Lease, Real Estate Taxes and Operating Expenses shall not include any
inheritance, personal income, estate, transfer or recordation taxes.
5.4 Personal Property Taxes.
(a) Lessee shall pay prior to delinquency all taxes
assessed against and levied upon its Alterations and Utility Installations,
Trade Fixtures, furnishings, equipment and all other personal property of Lessee
contained in the Premises or stored within the Industrial Center or elsewhere.
When possible, Lessee shall cause its Lessee-Owned Alterations and Utility
Installations, Trade Fixtures, furnishings, equipment and all other personal
property to be assessed and billed separately from the real property of Lessor.
(b) If any of such personal property of Lessee shall
be assessed with Lessor's property, Lessee shall pay Lessor the taxes
attributable to Lessee's property within thirty (30) days after receipt of a
written statement setting forth the taxes applicable to Lessee's property.
5.5 Joint Assessment. If the Building is not separately
assessed, Real Property Taxes allocated to the Building shall be an equitable
proportion of the Real Property Taxes for all of the land and improvements
included within the tax parcel assessed, such proportion to be determined by
Lessor from the respective valuations assigned in the assessor's work sheets or
such other information as may be reasonably available. Lessor's reasonable
determination thereof shall be conclusive.
5.6 Rent Tax. If applicable in the jurisdiction where the
Premises is situated, Lessee shall pay and be liable for all rental, sales and
use taxes or other similar taxes, if any, levied or imposed by any city, state,
county or other governmental body having authority, such payment is to be in
addition to all other payments required to be paid to Lessor by Lessee under the
terms of this Lease. Any such payment shall be paid concurrently with the
payment of the Base Rent or other charge upon which the tax is based as set
forth above.
6. Use; Compliance with Law; Condition of Premises.
6.1 Permitted Use. The Premises shall be used and occupied by
Lessee only for the following purpose (the "Permitted Use") and no other
purpose: the Office Space shall be used for general office purposes, and the
Warehouse Space shall be used as a storage and distribution facility for
products sold in PFC's and Lessee's retail stores.
6.2 Condition of the Premises. Lessee shall accept the
Premises in AS-IS condition at the Commencement Date. Lessor makes no
representations or
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warranties whatsoever regarding the Premises, the Building or the Industrial
Center, including without limitation about the condition of the Premises.
6.3 Compliance with Covenants, Restrictions and Building Code.
Lessee represents to Lessor that Lessee has received no written notice of any
claim by any governmental agency that a violation or violations of applicable
building codes, regulations, or ordinances exist with regard to the Premises as
of the Commencement Date. Said representation shall not apply to any Alterations
or Utility Installations made, or to be made, by Lessor. If the Premises do not
comply with said representation, Lessee shall, except as otherwise provided in
this Lease, promptly after receipt of written notice from Lessor, rectify any
such violation.
6.4 Acceptance of Premises. Lessee hereby acknowledges: (a)
that it has been advised to satisfy itself with respect to the condition of the
Premises (including but not limited to the electrical and fire sprinkler
systems, security, environmental aspects, the presence or absence of lead paint,
seismic and earthquake requirements, and compliance with the Americans with
Disabilities Act and applicable zoning, municipal, county, state and federal
laws, ordinances and regulations and any covenants or restrictions of record
(collectively, "Applicable Laws") and the present and future suitability of the
Premises for Lessee's intended use; (b) that it has made such investigation as
it deems necessary with reference to such matters, is satisfied with reference
thereto, and assumes all responsibility therefor as the same relate to Lessee's
occupancy of the Premises and/or the terms of this Lease; (c) that neither
Lessor, nor any of Lessor's agents, has made any oral or written representations
or warranties with respect to said matters; and (d)it accepts the Premises and
Industrial Center in their condition on the Commencement Date, "AS IS" and with
all defects, patent and latent.
6.5 Hazardous Substances.
(a) Reportable Uses Require Consent. The term
"Hazardous Substance" as used in this Lease shall mean any product, substance,
chemical, material or waste whose presence, nature, quantity and/or intensity of
existence, use, manufacture, disposal, transportation, spill, release or effect,
either by itself or in combination with other materials expected to be on the
Premises, is either: (i) potentially injurious to the public health, safety or
welfare, the environment, or the Premises; (ii) regulated or monitored by any
governmental authority; or (iii) a basis for potential liability of Lessor to
any governmental agency or third party under any applicable statute or common
law theory. Hazardous Substance shall include, but not be limited to,
hydrocarbons, petroleum, gasoline, crude oil or any products or by-products
thereof. Lessee shall not engage in any activity in or about the Premises which
constitutes a Reportable Use of Hazardous Substances without the express prior
written consent of Lessor and compliance in a timely manner (at Lessee's sole
cost and expense) with all Applicable Requirements. "Reportable Use" shall mean
(i) the installation or use of any above or below ground storage tank, (ii) the
generation, possession, storage, use, transportation, or disposal of a Hazardous
Substance that requires a permit from, or with respect to which a report,
notice, registration or business plan is required to be filed with, any
governmental authority, and (iii) the presence in, on or about the Premises of a
Hazardous Substance with respect to which any Applicable Laws require that a
notice be given to persons entering or occupying the Premises or neighboring
properties. Notwithstanding the foregoing, Lessee may, without Lessor's prior
consent, but upon prior written notice to Lessor and in compliance with all
Applicable Requirements, use any ordinary and customary materials reasonably
required to be used by Lessee in the normal course of the Permitted Use, so long
as such use is not a Reportable Use and does not expose the Premises or
neighboring properties to any meaningful risk of contamination or damage or
expose Lessor to any liability therefor. In addition, Lessor may (but without
any obligation to do so) condition its consent to any Reportable Use of any
Hazardous Substance by Lessee upon Lessee's giving Lessor such additional
assurances as Lessor, in its reasonable discretion, deems necessary to protect
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itself, the public, the Premises and the environment against damage,
contamination or injury and/or liability therefor, including but not limited to
the installation (and, at Lessor's option, removal) on or before the Expiration
Date of reasonably necessary protective modifications to the Premises (such as
concrete encasements) and/or the deposit of an additional Security Deposit under
PARAGRAPH 15. Notwithstanding anything to the contrary contained in this Lease,
Lessor hereby consents to Lessee's storage and handling in and about the
Premises of all cosmetic and other products held by Lessee for sale. Lessee
agrees to comply with all Applicable Requirements relating to the storage and
handling of such products in or about the Premises.
(b) (1) Notification of Any Release or Discharge.
Lessee shall immediately notify Lessor in
writing of any "Release" of any Hazardous
Substance of which Lessee has knowledge,
whether or not the Release is in quantities
that would require under Applicable
Requirements the reporting of such Release
to a governmental or regulatory agency.
"Release" shall mean any spilling, leaking,
pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching,
dumping, or disposing into the indoor or
outdoor environment, including, without
limitation, the abandonment or discarding of
barrels, drums, containers, tanks or other
receptacles containing or previously
containing any Hazardous Substance, by
Lessee or its agents, contractors, employees
or invitees.
(2) Notification of Any Notice, Investigation,
or Claim. Lessee shall also immediately
notify Lessor in writing of, and shall
contemporaneously provide Lessor with a copy
of,
(A) Any written notice of Release of
Hazardous Substances in the Premises
that is provided by Lessee or any
subtenant or other occupant of the
Premises to a governmental or
regulatory agency;
(B) Any notice of a violation, or a
potential or alleged violation, of
any Applicable Requirement that is
received by Lessee or any subtenant
or other occupant of the Premises
from any governmental or regulatory
agency;
(C) Any inquiry, investigation,
enforcement, cleanup, removal, or
other action that is instituted or
threatened by a governmental or
regulatory agency against Lessee or
any subtenant or other occupant of
the Premises and that relates to the
Release of any Hazardous Substance
on or from the Premises;
(D) Any claim that is instituted or
threatened by any third party
against Lessee or any subtenant or
other occupant of the Premises and
that relates to any Release of any
Hazardous Substance on or from the
Premises; and
(E) Any notice of the loss of any
environmental operating permit by
Lessee or any subtenant or other
occupant of the Premises.
(3) Failure to Comply. Failure to comply with
the provisions of this PARAGRAPH 6.5 shall
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constitute a material default under this
Lease. In the event of such default, Lessor
shall have all rights available under the
Lease and at law or equity including,
without limitation, the right to either:
(A) Terminate the Lease and collect
damages Lessor incurs as a result of
such default, including, without
limitation, cleanup costs incurred
by Lessor resulting from the cleanup
of any Hazardous Substances released
into the Premises, soil, or
groundwater; or
(B) Require the cleanup of such
Hazardous Substance at the Lessee's
sole expense while still enforcing
the remaining terms and obligations
of the Lease.
(c) Indemnification. Lessee shall indemnify, protect, defend
and hold Lessor, its shareholders, agents, employees, lenders and ground lessor,
if any, and the Industrial Center, harmless from and against any and all
damages, liabilities, judgments, costs, claims, liens, expenses, penalties, loss
of permits and attorneys' and consultants' fees arising out of or involving any
Hazardous Substance brought onto the Premises by or for Lessee or by anyone
under Lessee's control. Lessee's obligations under this PARAGRAPH shall include,
but not be limited to, the effects of any contamination or injury to person,
property or the environment created or suffered to exist by Lessee, and the cost
of investigation (including consultants' and attorneys' fees and testing),
removal, remediation, restoration and/or abatement thereof, or of any
contamination therein involved, and shall survive the expiration or earlier
termination of this Lease. Lessee's obligations under this PARAGRAPH shall also
include, but not be limited to, the defense or pursuit of any claim or any
action or proceeding involved therein, and whether or not (in the case of claims
made against Lessor and/or such other indemnified persons and entities)
litigated and/or reduced to judgment. In case any action or proceeding be
brought against Lessor and/or such other indemnified persons and entities by
reason of any of the foregoing matters, Lessee upon notice from Lessor shall
defend the same at Lessee's expense by counsel reasonably satisfactory to Lessor
and Lessor shall cooperate with Lessee in such defense. Lessor or such other
indemnified persons and entities need not have first paid any such claim in
order to be so indemnified. The provisions of this PARAGRAPH 6.5 shall survive
the expiration or earlier termination of this Lease. No termination,
cancellation or release agreement entered into by Lessor and Lessee shall
release Lessee from its obligations under this Lease with respect to Hazardous
Substances, unless specifically so agreed by Lessor in writing at the time of
such agreement by reference to this PARAGRAPH.
(d) Indemnification. Lessor shall indemnify, protect,
defend and hold Lessee, its shareholders, agents, employees, and lenders if any,
harmless from and against any and all damages, liabilities, judgments, costs,
claims, liens, expenses, penalties, loss of permits and attorneys' and
consultants' fees arising out of or involving any Hazardous Substance brought
onto the Industrial Center, other than by or for Lessee or by anyone under
Lessee's control. Lessor's obligations under this PARAGRAPH shall include, but
not be limited to, the effects of any contamination or injury to person,
property or the environment created or suffered to exist by Lessor, and the cost
of investigation (including consultants' and attorneys' fees and testing),
removal, remediation, restoration and/or abatement thereof, or of any
contamination therein involved, and shall survive the expiration or earlier
termination of this Lease. Lessor's obligations under this PARAGRAPH shall also
include, but not be limited to, the defense or pursuit of any claim or any
action or proceeding involved therein, and whether or not (in the case of claims
made against Lessee and/or such other indemnified persons and entities)
litigated and/or reduced to judgment. In case any action or proceeding be
brought against Lessee and/or such other indemnified persons and entities by
reason of any of the foregoing matters, Lessor upon notice from Lessee shall
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defend the same at Lessor's expense by counsel reasonably satisfactory to Lessee
and Lessee shall cooperate with Lessor in such defense. Lessee or such other
indemnified persons and entities need not have first paid any such claim in
order to be so indemnified. The provisions of this PARAGRAPH 6.5 shall survive
the expiration or earlier termination of this Lease. No termination,
cancellation or release agreement entered into by Lessor and Lessee shall
release Lessor from its obligations under this Lease with respect to Hazardous
Substances, unless specifically so agreed by Lessee in writing at the time of
such agreement by reference to this PARAGRAPH.
6.6 Lessee's Compliance with Requirements. Lessee shall, at
Lessee's sole cost and expense, fully, diligently and in a timely manner, comply
with all Applicable Requirements. "Applicable Requirements" means all laws,
rules, regulations, ordinances, directives, covenants, easements and
restrictions of record, permits, and the requirements of any applicable fire
insurance underwriter or rating bureau, relating in any manner to the Premises
(including but not limited to matters pertaining to (i) industrial hygiene, (ii)
environmental conditions on, in, under or about the Premises, including soil and
groundwater conditions, and (iii) the use, generation, manufacture, production,
installation, maintenance, removal, transportation, storage, spill, or release
of any Hazardous Substance), now in effect or which may hereafter come into
effect. Lessee shall, within five (5) days after receipt of Lessor's written
request, provide Lessor with copies of all documents and information, including
but not limited to permits, registrations, manifests, applications, reports and
certificates, evidencing Lessee's compliance with any Applicable Requirements
specified by Lessor, and shall immediately upon receipt, notify Lessor in
writing (with copies of any documents involved) of any threatened or actual
claim, notice, citation, warning, complaint or report pertaining to or involving
failure by Lessee or the Premises to comply with any Applicable Requirements.
6.7 Inspection; Compliance with Law. Lessor, Lessor's agents,
employees, contractors and designated representatives, and the holders of any
mortgages, deeds of trust or ground leases on the Industrial Center or any
interest therein ("Lenders") shall have the right to enter the Premises at any
time in the case of an emergency, and otherwise at reasonable times, for the
purpose of inspecting the condition of the Premises and for verifying compliance
by Lessee with this Lease and all Applicable Requirements, and Lessor shall be
entitled to employ experts and/or consultants in connection therewith to advise
Lessor with respect to Lessee's activities, including but not limited to
Lessee's installation, operation, use, monitoring, maintenance, or removal of
any Hazardous Substance on or from the Premises. The costs and expenses of any
such inspections shall be paid by the party requesting same, unless a Default or
Breach of this Lease by Lessee or a violation of Applicable Requirements or a
contamination, caused or materially contributed to by Lessee, is found to exist
or to be imminent, or unless the inspection is requested or ordered by a
governmental authority as the result of any such existing or imminent violation
or contamination. In such case, Lessee shall upon request reimburse Lessor or
Lessor's Lender, as the case may be, for the costs and expenses of such
inspections.
7. Rules and Regulations. Lessor shall have the right to enact, modify, amend
and enforce reasonable rules and regulations for the Industrial Center (the
"Rules and Regulations"). Lessee and Lessee's employees, suppliers, shippers,
contractors, customers, invitees and agents shall observe faithfully and comply
strictly with the Rules and Regulations; provided, however, that in case of any
conflict or inconsistency between the provisions of this Lease and of any of the
Rules and Regulations as originally or as hereafter adopted, the provisions of
this Lease shall control. Lessor shall not be responsible to Lessee for the
non-compliance with the Rules and Regulations by other lessees of the Industrial
Center, or any part thereof, and/or any of their employees, suppliers, shippers,
contractors, customers, invitees and agents. Written notice of any additional
Rules and Regulations shall be given to Lessee. No written Rules and Regulations
presently exist.
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8. Maintenance, Repairs, Utility Installations, Trade Fixtures,
Alterations and Common Area Service.
8.1 Lessor's Obligations. Subject to the other provisions of
this Lease, including, without limitation, PARAGRAPHS 6.2 (Condition of the
Premises), 6.3 (Compliance with Covenants, Restrictions and Building Code), 4.3
(Common Area Operating Expenses), 6.1 (Permitted Use), 11 (Damage or
Destruction) and 10 (Condemnation), Lessor, subject to reimbursement pursuant to
PARAGRAPH 4.3, shall keep in good order, condition and repair the foundations,
exterior walls, structural condition of interior bearing walls, exterior roof,
fire sprinkler and/or standpipe and hose (if located in the Common Areas) or
other automatic fire extinguishing system, including fire alarm and/or smoke
detection systems and equipment of the Industrial Center, including, fire
hydrants, parking lots, walkways, parkways, driveways, landscaping, fences,
signs and utility systems serving the Common Areas and all parts thereof. Lessor
shall not be obligated to paint the exterior or interior surfaces of exterior
walls nor shall Lessor be obligated to maintain, repair or replace windows,
doors or plate glass of the Premises. Lessor shall not be obligated to paint,
repair or replace wall coverings or to repair or replace any improvements that
have become damaged as a result of the negligent or intentional acts of Lessee.
Lessor shall in no event be responsible to repair, replace or otherwise maintain
any improvements to the Premises made by Lessee. Except as provided in PARAGRAPH
11.5, there shall be no abatement of rent or liability of Lessor on account of
any injury or interference with Lessee's business with respect to any
improvements, alterations or repairs made by Lessor to the Industrial Center or
any part thereof. Lessee expressly waives the benefit of any statute now or
hereafter in effect which would otherwise afford Lessee the right to make
repairs at Lessor's expense or terminate this Lease because of Lessor's failure
to keep the Building, the Industrial Center or the Common Areas in good order,
condition and repair. Lessor shall have the right and responsibility to make all
capital improvements to the Industrial Center, and to charge Lessee for same as
hereinafter provided.
8.2 Lessee's Obligations.
(a) Subject to the other provisions of this Lease,
including, without limitation, PARAGRAPHS 8.1 (Lessor's Obligations), 11 (Damage
or Destruction), and 10 (Condemnation), Lessee shall, at Lessee's sole cost and
expense and at all times, put and keep the Premises and every part thereof in
good order, condition and repair (whether or not such portion of the Premises
requiring repair, or the means of repairing the same, are reasonably or readily
accessible to Lessee, and whether or not the need for such repairs occurs as a
result of Lessee's use, any prior use, the elements or the age of such portion
of the Premises), including, without limiting the generality of the foregoing,
all equipment or facilities specifically serving the Premises, such as plumbing,
heating, air conditioning, ventilating, electrical, lighting facilities,
boilers, fired or unfired pressure vessels, fire hose connections if within the
Premises, fixtures, interior walls, interior surfaces of exterior walls,
ceilings, floors, windows, doors, plate glass, and skylights, but excluding any
items which are the responsibility of Lessor pursuant to PARAGRAPH 8.1. Lessee,
in putting and keeping the Premises in good order, condition and repair, shall
exercise and perform good maintenance practices. Lessee's obligations shall
include restorations, replacements or renewals when necessary to put and keep
the Premises and all improvements thereon or a part thereof in good order,
condition and state of repair, but only to the extent that such restorations,
replacements or renewals do not constitute capital improvements.
(b) Lessee shall, at Lessee's sole cost and expense,
procure and maintain a contract, with copies to Lessor, in customary form and
substance for and with a contractor specializing and experienced in the
inspection, maintenance and service of the heating, air conditioning and
ventilation system for the Premises. However, Lessor reserves the right, upon
notice to Lessee, to procure and maintain the contract for the heating, air
conditioning and ventilating systems, and if Lessor so elects, Lessee shall
reimburse Lessor, upon demand, for the cost thereof.
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(c) If Lessee fails to perform Lessee's obligations
under this PARAGRAPH, Lessor may enter upon the Premises after ten (10) days'
prior written notice to Lessee (except in the case of an emergency, in which
case no notice shall be required), perform such obligations on Lessee's behalf,
and put the Premises in good order, condition and repair, in accordance with
PARAGRAPH 14.2, and Lessee shall pay Lessor, within thirty (30) days of demand,
the costs therefor.
(d) In the event that Lessor makes any capital
expenditure benefitting the Premises during the Term of this Lease, the amount
of such expenditure shall be amortized over the useful life of the improvement
for which the expenditure was made, and the amortized cost allocated to each
calendar year during the Term shall be treated as an Operating Expense.
8.3 Utility Installations, Trade Fixtures, Alterations.
(a) Definitions; Consent Required. "Utility
Installations" shall mean all air lines, power panels, electrical distribution,
security, fire protection systems, communications systems, lighting fixtures,
heating, ventilating and air conditioning equipment, plumbing, and fencing in,
on or about the Premises installed after the date of this Lease. "Trade
Fixtures" shall mean Lessee's machinery and equipment which can be removed
without doing material damage to the Premises. "Alterations" shall mean any
modification after the date of this Lease of the improvements on the Premises
which are provided by Lessor under the terms of this Lease, other than Utility
Installations or Trade Fixtures. "Lessee-Owned Alterations and/or Utility
Installations" shall mean Alterations and/or Utility Installations made by
Lessee that are not yet owned by Lessor pursuant to PARAGRAPH 8.4(a). Lessee
shall not make nor cause to be made any Alterations or Utility Installations in,
on, under or about the Premises without Lessor's prior written consent. Lessee
may, however, make non-structural Utility Installations to the interior of the
Premises (excluding the roof) without Lessor's consent but upon prior written
notice to Lessor, so long as they are not visible from the outside of the
Premises, do not involve puncturing, relocating or removing the roof or any
existing walls, or changing or interfering with the fire sprinkler or fire
detection systems and the cumulative cost thereof during the Term does not
exceed $10,000.00.
(b) Consent. Any Alterations or Utility Installations
that Lessee shall desire to make and which require the consent of Lessor shall
be presented to Lessor in written form with detailed plans. All consents given
by Lessor, whether by virtue of PARAGRAPH 8.3(a) or by subsequent specific
consent, shall be deemed conditioned upon: (i) Lessee's acquiring all applicable
permits required by governmental authorities; (ii) the furnishing of copies of
such permits together with a copy of the plans and specifications for the
Alteration or Utility Installation to Lessor prior to commencement of the work
thereon; and (iii) the compliance by Lessee with all conditions of said permits
in a prompt and expeditious manner. Any Alterations or Utility Installations by
Lessee during the Term shall be done in a good and workmanlike manner, with good
and sufficient lien-free materials, and be in compliance with all Applicable
Requirements. Lessee shall promptly upon completion thereof furnish Lessor with
as-built plans and specifications therefor. Lessor may (but without obligation
to do so) condition its consent to any requested Alteration or Utility
Installation that costs $10,000.00 or more upon Lessee's providing Lessor with a
lien and completion bond, or other security reasonably satisfactory to Lessor,
in an amount equal to one and one-half times the estimated cost of such
Alteration or Utility Installation. At the expiration of the Term, Lessor may
require the removal of any or all of the Alterations, improvements, additions or
Utility Installations, and the restoration of the Premises and, to the extent
Lessee has performed any work on the same, the Industrial Center to their prior
condition, at Lessee's expense. Should Lessor permit Lessee to make its own
Alterations, improvements, additions or Utility Installations, Lessee shall use
only a contractor who has been expressly approved by Lessor in writing. Should
Lessee make any Alterations, improvements, additions or Utility Installations
without the prior written approval of Lessor (except those for which Lessee is
not required to have Lessor's consent), or use a contractor not expressly
approved by Lessor, Lessor may, at any time during the Term, require that Lessee
remove any part or all of the same.
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(c) Lien Protection. Lessee shall pay when due all
claims for labor or materials furnished or alleged to have been furnished to or
by Lessee at or for use on the Premises, which claims are or may be secured by
any mechanic's or materialmen's lien against the Industrial Center or any
interest therein. Lessee shall give Lessor not less than ten (10) days' notice
prior to the commencement of any work in, on, or about the Premises, and Lessor
shall have the right to post notices of non-responsibility in or on the Premises
as provided by law or otherwise. If Lessee shall, in good faith, contest the
validity of any such lien, claim or demand, then Lessee shall, at its sole
expense, defend and protect itself, Lessor and the Industrial Center against the
same and shall pay and satisfy any such adverse judgment that may be rendered
thereon before the enforcement thereof against Lessor or the Industrial Center.
If Lessor shall require, Lessee shall furnish to Lessor a surety bond
satisfactory to Lessor in an amount equal to one and one-half times the amount
of such contested lien claim or demand, indemnifying Lessor against liability
for the same, as required by law for the holding of the Industrial Center free
from the effect of such lien or claim. In addition, Lessor may require Lessee to
pay Lessor's attorneys' fees and costs in participating in such action if Lessor
shall decide it is to its best interest to do so.
8.4 Ownership, Removal, Surrender, and Restoration.
(a) Ownership. Subject to Lessor's right to require
their removal and to cause Lessee to become the owner thereof as hereinafter
provided in this PARAGRAPH 8.4, all Alterations and Utility Installations made
to the Premises by Lessee shall be the property of and owned by Lessee, but
considered a part of the Premises. Lessor may, at any time and at its option,
elect, in a writing to Lessee, to be the owner of all or any specified part of
the Lessee-Owned Alterations and Utility Installations. Unless otherwise
instructed pursuant to PARAGRAPH 8.4(b), all Lessee-Owned Alterations and
Utility Installations shall, at the expiration or earlier termination of this
Lease, become the property of Lessor and remain upon the Premises and be
surrendered with the Premises by Lessee.
(b) Removal. Unless otherwise agreed in writing,
Lessor may require that any or all Lessee-Owned Alterations or Utility
Installations be removed by the expiration or earlier termination of this Lease,
notwithstanding that their installation may have been consented to by Lessor.
Lessor may require the removal at Lessee's sole expense, at any time of all or
any part of any Alterations or Utility Installations made without the required
consent of Lessor.
(c) Surrender/Restoration. Lessee shall surrender the
Premises by the end of the Term or any earlier termination date, clean and free
of debris and in good operating order, condition and state of repair, ordinary
wear and tear excepted. Ordinary wear and tear shall not include any damage or
deterioration that would have been prevented by good maintenance practice or by
Lessee performing all of its obligations under this Lease. Except as otherwise
agreed or specified herein, the Premises, as surrendered, shall include the
Alterations and Utility Installations. The obligation of Lessee shall include
the repair of any damage occasioned by the installation, maintenance or removal
of Lessee's Trade Fixtures, furnishings, equipment, and Lessee-Owned Alterations
and Utility Installations, as well as the removal of any storage tank installed
by or for Lessee, and the removal, replacement or remediation of any soil,
material or ground water contaminated by Lessee, all as may then be required by
Applicable Requirements and/or good practice. Lessee's Trade Fixtures shall
remain the property of Lessee and shall be removed by Lessee subject to its
obligations to repair and restore the Premises pursuant to this Lease.
14
8.5 Americans with Disabilities Act of 1990. Within ten (10)
days after receipt, Lessor and Lessee shall advise the other party in writing,
and provide the other with copies of (as applicable), any notices alleging
violation of the Americans with Disabilities Act of 1990 ("ADA") relating to any
portion of the Premises; any claims made or threatened in writing regarding
noncompliance with the ADA and relating to any portion of the Premises; or any
governmental or regulatory actions or investigations instituted or threatened
regarding noncompliance with the ADA and relating to any portion of the
Premises.
9. Insurance; Indemnity.
9.1 Payment of Premium and Blanket Policies. The cost of the
premiums for the insurance policies maintained by Lessor under this PARAGRAPH
shall be a Common Area Operating Expense pursuant to PARAGRAPH 4.3 hereof.
Premiums for policy periods commencing prior to, or extending beyond, the Term
shall be pro-rated to coincide with the corresponding Commencement Date or
Expiration Date. The casualty insurance policies required under this PARAGRAPH
shall provide that the proceeds thereof shall be payable to Lessor and may be
payable to any Lender, as their respective interests may appear, pursuant to a
standard mortgagee clause or loss payee clause. Insurance required to be carried
by Lessor and Lessee pursuant to this PARAGRAPH may, at Lessor's or Lessee's
option, be effected by either "blanket" or "umbrella" policies issued to Lessor
or Lessee, as the case may be, covering the Premises and other properties owned
or leased by Lessor or Lessee, as the case may be, provided that such policies
otherwise comply with the provisions of this Lease and allocate to the Premises
the specified coverage without possibility of reduction or coinsurance by reason
of, or because of, damage to any other properties named therein. If the
insurance required to be obtained by Lessee pursuant to this Lease is effected
by any such blanket or umbrella policies, Lessee shall furnish Lessor with
copies of such policies as provided in this PARAGRAPH, together with schedules
attached thereto giving the amount of insurance applicable to the Premises and
evidence, satisfactory to Lessor, that the premiums of such policies for at
least the first year of the Term (or installment payments then required to have
been paid on account of such premiums) have been paid.
9.2 Liability Insurance - Lessee. Lessee shall obtain and keep
in full force and effect during the Term a Commercial General Liability policy
of insurance protecting Lessee, Lessor and any Lender(s) whose names have been
provided to Lessee in writing (as additional insureds) against claims for bodily
injury, personal injury and property damage based upon, involving or arising out
of the ownership, use, occupancy or maintenance of the Premises and all areas
appurtenant thereto. Such insurance shall be on an occurrence basis providing
single limit coverage in an amount not less than $3,000,000 per occurrence with
(a) "Additional Insured-Manager of Lessor of Premises" endorsement and (b)
contain the "Amendment of the Pollution Exclusion" endorsement for damage caused
by heat, smoke or fumes from a hostile fire. The policy shall not contain any
intra-insured exclusions as between insured persons or organizations, but shall
include coverage for liability assumed under this Lease as an "insured contract"
for the performance of Lessee's indemnity obligations under this Lease. The
limits of said insurance required by this Lease or as carried by Lessee shall
not, however, limit the liability of Lessee nor relieve Lessee of any obligation
hereunder. All insurance to be carried by Lessee shall be primary to and not
contributory with any similar insurance carried by Lessor, whose insurance shall
be considered excess insurance only.
9.3 Liability Insurance - Lessor. Lessor shall also maintain
liability insurance described in PARAGRAPH 9.2 above, in addition to and not in
lieu of, the insurance required to be maintained by Lessee. Lessee shall not be
named as an additional insured therein.
9.4 Property Insurance-Building and, Improvements.
(a) Building and Improvements. Lessor shall obtain
and keep in full force and effect during the Term a policy or policies in the
name of Lessor, with loss payable to Lessor and to any Lender(s), insuring
against loss or damage to the Premises, but not against loss or damage to
Lessee-Owned Alterations and Utility Installations, Trade Fixtures and Lessee's
15
personal property. Such insurance shall be for full replacement cost, as the
same shall exist from time to time, or the amount required by any Lender(s), but
in no event more than the commercially reasonable and available insurable value
thereof if, by reason of the unique nature or age of the improvements involved,
such latter amount is less than full replacement cost. Lessee-Owned Alterations
and Utility Installations, Trade Fixtures and Lessee's personal property shall
be insured by Lessee pursuant to PARAGRAPH 9.5 and Lessor shall not be
responsible for insuring the same. If the coverage is available and commercially
appropriate, Lessor's policy or policies shall insure against all risks of
direct physical loss or damage (except the perils of flood and/or earthquake
unless required by a Lender), including coverage for any additional costs
resulting from debris removal and reasonable amounts of coverage for the
enforcement of any ordinance or law requiring the reconstruction or replacement
of any undamaged sections of the Building required to be demolished or removed
by reason of the enforcement of any building, zoning, safety or land use laws as
the result of a covered loss, but not including plate glass insurance. Said
policy or policies shall also contain an agreed valuation provision in lieu of
any co-insurance clause, waiver of subrogation, and inflation guard protection
causing an increase in the annual property insurance coverage amount by a factor
of not less than the adjusted U.S. Department of Labor Consumer Price Index for
All Urban Consumers for the city nearest to where the Premises are located.
(b) Additional Insurance Premiums. Lessee shall pay any
increase in the premiums for the property insurance of the Building and for the
Common Areas or other buildings in the Industrial Center if said increase is
caused by Lessee's acts, omissions, use or occupancy of the Premises.
(c) Lessee's Improvements. Lessor shall not be required to
insure Lessee-Owned Alterations and Utility Installations, Trade Fixtures and
Lessee's personal property unless the item in question has become the property
of Lessor under the terms of this Lease.
9.5 Lessee's Property Insurance. Lessee at its cost shall
either by separate policy or, at Lessor's option, by endorsement to a policy
already carried, maintain insurance coverage on all of Lessee's personal
property, Trade Fixtures and Lessee-Owned Alterations and Utility Installations
in, on, or about the Premises similar in coverage to that carried by Lessor
under PARAGRAPH 9.4(a). Such insurance shall be full replacement cost coverage
with a deductible not to exceed $1,000 per occurrence. The proceeds from any
such insurance shall be used by Lessee for the replacement of personal property
and the restoration of Trade Fixtures and Lessee-Owned Alterations and Utility
Installations. Upon request from Lessor, Lessee shall provide Lessor with
written evidence that such insurance is in force.
9.6 INTENTIONALLY OMMITED.
9.7 Insurance Policies. Insurance required hereunder shall be
in companies duly licensed to transact business in the state where the Premises
are located, and maintaining during the policy term a "General Policyholders
Rating" of at least A, X or such other rating as may be required by a Lender, as
set forth in the most current issue of "Best's Insurance Guide." Lessee shall
not do or permit to be done anything which shall invalidate the insurance
policies referred to in this PARAGRAPH. Lessee shall deliver to Lessor, no later
than the Commencement Date, certified copies of, or certificates evidencing the
existence and amounts of, the insurance required under PARAGRAPHS 9.2 and 9.5.
No such policy shall be cancelable or subject to reduction except after thirty
(30) days' prior written notice to Lessor. Lessee shall, at least thirty (30)
days prior to the expiration of such policies, furnish Lessor with evidence of
renewals or "insurance binders" evidencing renewal thereof, or Lessor may (but
shall not be obligated to) order such insurance and charge the cost thereof to
Lessee, which amount shall be payable by Lessee to Lessor upon demand.
16
9.8 Waiver of Subrogation. Notwithstanding anything to the
contrary contained in this Lease, without affecting any other rights or
remedies, Lessee and Lessor each hereby release and relieve the other, and waive
their entire right to recover damages (whether in contract or in tort) against
the other, for loss or damage to their property arising out of or incident to
the perils required to be insured against under this PARAGRAPH. The effect of
such releases and waivers of the right to recover damages shall not be limited
by the amount of insurance carried or required, or by any deductibles applicable
thereto. Lessor and Lessee agree to have their respective insurance companies
issuing property damage insurance waive any right to subrogation that such
companies may have against Lessor or Lessee, as the case may be, so long as the
insurance is not invalidated thereby.
9.9 Indemnity. Except for Lessor's negligence and/or breach of
express covenants and warranties, Lessee shall indemnify, protect, defend and
hold harmless the Industrial Center, Lessor, its shareholders, agents, officers,
directors, employees and its master or ground lessor, partners and Lenders, from
and against any and all claims, loss of rents and/or damages, costs, liens,
judgments, penalties, loss of permits, attorneys' and consultants' fees,
expenses and/or liabilities arising out of, involving, or in connection with,
the occupancy of the Premises by Lessee, the conduct of Lessee's business, any
act, omission or neglect of Lessee, its agents, contractors, employees or
invitees, and out of any Default or Breach by Lessee in the performance in a
timely manner of any obligation on Lessee's part to be performed under this
Lease. The foregoing shall include, but not be limited to, the defense or
pursuit of any claim or any action or proceeding involved therein, and whether
or not (in the case of claims made against Lessor and/or such other indemnified
persons and entities) litigated and/or reduced to judgment. In case any action
or proceeding be brought against Lessor and/or such other indemnified persons
and entities by reason of any of the foregoing matters, Lessee upon notice from
Lessor shall defend the same at Lessee's expense by counsel reasonably
satisfactory to Lessor and Lessor shall cooperate with Lessee in such defense.
Lessor or such other indemnified persons and entities need not have first paid
any such claim in order to be so indemnified.
9.10 Exemption of Lessor from Liability. Except to the extent
of direct damages caused by breach of any covenant of Lessor contained in
PARAGRAPH 8.1, or the gross negligence or reckless or wilful misconduct of
Lessor, and Subject to the last sentence of this PARAGRAPH, Lessor shall not be
liable for injury or damage to the person or goods, wares, merchandise or other
property of Lessee, Lessee's shareholders, officers, directors, employees,
contractors, invitees, customers, or any other person in or about the Premises,
whether such damage or injury is caused by or results from fire, steam,
electricity, gas, water or rain, or from the breakage, leakage, obstruction or
other defects of pipes, fire sprinklers, wires, appliances, plumbing, air
conditioning or lighting fixtures, or from any other cause, whether said injury
or damage results from conditions arising upon the Premises or upon other
portions of the Building of which the Premises are a part, or from other sources
or places, and regardless of whether the cause of such damage or injury or the
means of repairing the same is accessible or not. Lessor shall not be liable for
any damages arising from any act or neglect of any other lessee of Lessor or
from the failure by Lessor to enforce the provisions of any other lease in the
Industrial Center. Notwithstanding Lessor's gross negligence, wilful or reckless
misconduct or breach of any covenant, including without limitation those
contained in PARAGRAPH 8.1, or any other provision of this Lease, Lessor shall
under no circumstances be liable for injury to Lessee's business or for any loss
of income or profit therefrom, or for consequential or indirect damages
resulting from Lessor's acts or omissions.
9.11 No Representation of Adequate Coverage. Lessor makes no
representation that the limits or forms of coverage of insurance specified in
this PARAGRAPH are adequate to cover Lessee's property or obligations under this
Lease.
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10. Condemnation. If the Premises or any portion thereof is taken under the
power of eminent domain or sold under the threat of the exercise of said power
(all of which are herein called "condemnation"), this Lease shall terminate as
to the part so taken as of the date the condemning authority takes title or
possession, which ever first occurs. If more than twenty-five percent (25%) of
the floor area of the Premises, or more than twenty-five percent (25%) of the
portion of the Common Areas designated for Lessee's parking, is taken by
condemnation, Lessee may, at Lessee's option, to be exercised in writing within
thirty (30) days after Lessor shall have given Lessee written notice of such
taking (or in the absence of such notice, within thirty (30) days after the
condemning authority shall have taken possession) terminate this Lease as of the
date the condemning authority takes such possession. If Lessee does not
terminate this Lease in accordance with the foregoing, this Lease shall remain
in full force and effect as to the portion of the Premises remaining, except
that the Base Rent shall be reduced in the same proportion as the rentable floor
area of the Premises taken bears to the total rentable floor area of the
Premises. No reduction of Base Rent shall occur if the condemnation does not
apply to any portion of the Premises. Lessor shall have the option, in its sole
discretion, to terminate this Lease as of the taking of possession by the
condemning authority, by giving written notice to Lessee of such election within
thirty (30) days after receipt of notice of a taking by condemnation of any
substantial part (i.e., 25% or more of the rentable area) of the Building or of
the Industrial Center. Any award for the taking of all or any part of the
Premises under the power of eminent domain or any payment made under threat of
the exercise of such power shall be the property of Lessor, whether such award
shall be made as compensation for diminution of value of the leasehold or for
the taking of the fee, or as severance damages; provided, however, that Lessee
shall be entitled to any compensation separately awarded to Lessee for Lessee's
relocation expenses and/or loss of Lessee's Trade Fixtures. In the event that
this Lease is not terminated by reason of such condemnation, Lessor shall to the
extent of its net severance damages received, over and above Lessee's Share of
the legal and other expenses incurred by Lessor in the condemnation matter,
repair any damage to the Premises caused by such condemnation authority. Lessee
shall be responsible for the payment of any amount in excess of such net
severance damages required to complete such repair.
11. Damage or Destruction.
11.1 Definitions.
(a) "Insured Loss" shall mean damage or destruction to
the Premises, other than Lessee-Owned Alterations and Utility Installations and
Trade Fixtures, which was caused by an event required to be covered by the
insurance described in PARAGRAPH 9.4(a) irrespective of any deductible amounts
or coverage limits involved.
(b) "Premises Partial Damage" shall mean damage or
destruction to the Premises, other than Lessee-Owned Alterations and Utility
Installations and Trade Fixtures, the repair cost of which damage or destruction
is less than twenty-five percent (25%) of the then Replacement Cost of the
Premises (excluding Lessee-Owned Alterations and Utility Installations and Trade
Fixtures) immediately prior to such damage or destruction.
(c) "Premises Total Destruction" shall mean damage or
destruction to the Premises, other than Lessee-Owned Alterations and Utility
Installations and Trade Fixtures, the repair cost of which damage or destruction
is twenty-five percent (25%) or more of the then Replacement Cost of the
Premises (excluding Lessee-Owned Alterations and Utility Installations and Trade
Fixtures) immediately prior to such damage or destruction. In addition, damage
or destruction to the Building, other than Lessee-Owned Alterations and Utility
Installations and Trade Fixtures of any lessees of the Building, the cost of
which damage or destruction is twenty-five percent (25%) or more of the then
Replacement Cost (excluding Lessee-Owned Alterations and Utility Installations
and Trade Fixtures of any lessees of the Building) of the Building shall, at the
option of Lessor, be deemed to be Premises Total Destruction.
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(d) "Replacement Cost" shall mean the cost to repair
or rebuild the damaged improvements owned by Lessor to the condition that
existed immediately prior to the damage occurring, excluding all improvements
made by lessees.
(e) "Hazardous Substance Condition" shall mean the
occurrence or discovery of a condition involving the presence of, or a
contamination by, a Hazardous Substance in, on, or under the Premises.
11.2 Premises Partial Damage.
(a) Insured Loss. If Premises Partial Damage that
is an Insured Loss occurs, then Lessor shall, at Lessor's expense, repair such
damage (but not Lessee's Trade Fixtures or Lessee-Owned Alterations and Utility
Installations) as soon as reasonably possible and this Lease shall continue in
full force and effect. In the event, however, that there is a shortage of
insurance proceeds and such shortage is due to the fact that, by reason of the
unique nature of the improvements in the Premises, full replacement cost
insurance coverage was not commercially reasonably and available, Lessor shall
have no obligation to pay for the shortage of insurance proceeds or to fully
restore the unique aspects of the Premises unless Lessee provides Lessor with
the funds to cover same, or adequate assurance thereof, within ten (10) days
following receipt of written notice of such shortage and request therefor. If
Lessor receives said funds or adequate assurance thereof satisfactory to Lessor
in its sole discretion within said ten (10) day period, Lessor shall complete
such restoration and repairs as soon as reasonably possible and this Lease shall
remain in full force and effect. If Lessor does not receive such funds or
assurance within said period, Lessor may nevertheless elect by written notice to
Lessee within ten (10) days thereafter to make such restoration and repair as is
commercially reasonable with Lessor paying any shortage in proceeds, in which
case this Lease shall remain in full force and effect. If Lessor does not
receive such funds or assurance within such ten (10) day period, and if Lessor
does not so elect to restore and repair, then this Lease shall terminate sixty
(60) days following the occurrence of the damage or destruction. Unless
otherwise agreed, Lessee shall in no event have any right to reimbursement from
Lessor for any funds contributed by Lessee to repair any such damage or
destruction. Premises Partial Damage due to flood or earthquake shall be subject
to PARAGRAPH 11.2(b) rather than PARAGRAPH 11.2(a), notwithstanding that there
may be some insurance coverage, but the net proceeds of any such insurance shall
be made available for the repairs if made by either party.
(b) Uninsured Loss. If Premises Partial Damage that
is not an Insured Loss occurs, unless caused by a negligent or willful act of
Lessee (in which event Lessee shall make the repairs at Lessee's expense and
this Lease shall continue in full force and effect), Lessor may at Lessor's
option, either (i) repair such damage as soon as reasonably possible at Lessor's
expense, in which event this Lease shall continue in full force and effect, or
(ii) give written notice to Lessee within thirty (30) days after receipt by
Lessor of knowledge of the occurrence of such damage of Lessor's desire to
terminate this Lease as of the date sixty (60) days following the date of such
notice. In the event Lessor elects to give such notice of Lessor's intention to
terminate this Lease, Lessee shall have the right within ten (10) days after the
receipt of such notice to give written notice to Lessor of Lessee's commitment
to pay for the repair of such damage totally at Lessee's expense and without
reimbursement from Lessor. Lessee shall provide Lessor with the required funds
or assurance thereof satisfactory to Lessor in its sole discretion within thirty
(30) days following such commitment from Lessee. In such event this Lease shall
continue in full force and effect, and Lessor shall proceed to make such repairs
as soon as reasonably possible after the required funds are available. If Lessee
does not give such notice and provide the funds or assurance thereof within the
times specified above, this Lease shall terminate as of the date specified in
Lessor's notice of termination.
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11.3 Total Destruction. Notwithstanding any other provision
hereof, if Premises Total Destruction occurs (including any destruction required
by any authorized public authority), this Lease shall terminate sixty (60) days
following the date of such Premises Total Destruction, whether or not the damage
or destruction is an Insured Loss or was caused by a negligent or willful act of
Lessee. In the event, however, that the damage or destruction was caused by
Lessee, Lessor shall have the right to recover Lessor's damages from Lessee
except as released and waived in PARAGRAPH 9.8.
11.4 Damage Near End of Term.
(a) If at any time during the last six (6) months of
the Term there is damage to the Premises for which the cost to repair exceeds
one month's total Base Rent for Office Space and Warehouse Space, whether or not
an Insured Loss, Lessor may, at Lessor's option, terminate this Lease effective
thirty (30) days following the date of occurrence of such damage by giving
written notice to Lessee of Lessor's election to do so.
(b) Provided, however, if Lessee at that time has an
exercisable option to extend this Lease, then Lessee may preserve this Lease by
(i) exercising such option, and (ii) providing Lessor with any shortage in
insurance proceeds (or adequate assurance thereof) needed to make the repairs on
or before the earlier of (aa) the date which is ten (10) days after Lessee's
receipt of Lessor's written notice purporting to terminate this Lease, or (bb)
the day prior to the date upon which such option expires. If Lessee duly
exercises such option during such period and provides Lessor with funds (or
adequate assurance thereof) to cover any shortage in insurance proceeds, Lessor
shall repair such damage as soon as reasonably possible and this Lease shall
continue in full force and effect. If Lessee fails to exercise such option and
provide such funds or assurance during such period, then this Lease shall
terminate as of the date set forth in the first sentence of this PARAGRAPH 11.4.
11.5 Abatement of Rent; Lessee's Remedies.
(a) In the event of (i) Premises Partial Damage or
(ii) a Hazardous Substance Condition for which Lessee is not legally
responsible, the Base Rent, Common Area Operating Expenses and other charges, if
any, payable by Lessee hereunder for the period during which such damage or
condition, its repair, remediation or restoration continues, shall be abated in
proportion to the degree to which Lessee's use of the Premises is impaired, but
not in excess of proceeds from insurance required to be carried under PARAGRAPH
9.4(b). No such abatement shall be given if or to the extent that the impairment
of use consists of relocation or re-allocation of parking or loading dock
privileges. Except for abatement of Base Rent, Common Area Operating Expenses
and other charges, if any, as aforesaid, all other obligations of Lessee
hereunder shall be performed by Lessee, and Lessee shall have no claim against
Lessor for any damage suffered by reason of any such damage, destruction,
repair, remediation or restoration.
(b) If Lessor shall be obligated to repair or restore
the Premises under the provisions of this PARAGRAPH 11 and shall not commence,
in a substantial and meaningful way, the repair or restoration of the Premises
within ninety (90) days after such obligation shall accrue, Lessee may, at any
time prior to the commencement of such repair or restoration, give written
notice to Lessor and to any Lenders of which Lessee has actual notice of
Lessee's election to terminate this Lease on a date not less than sixty (60)
days following the giving of such notice. If Lessee gives such notice to Lessor
and such Lenders and such repair or restoration is not commenced within thirty
(30) days after receipt of such notice, this Lease shall terminate as of the
date specified in said notice. If Lessor or a Lender commences the repair or
restoration of the Premises within thirty (30) days after the receipt of such
notice, this Lease shall continue in full force and effect. "Commence" as used
in this PARAGRAPH 11.5 shall mean either the unconditional authorization of the
preparation of the required plans, or the beginning of the actual work on the
Premises, whichever occurs first.
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11.6 Hazardous Substance Conditions. If a Hazardous Substance
Condition occurs, unless Lessee is legally responsible therefor (in which case
Lessee shall make the investigation and remediation thereof required by
Applicable Requirements and this Lease shall continue in full force and effect,
but subject to Lessor's rights under PARAGRAPH 6.5 and PARAGRAPH 14), Lessor may
at Lessor's option either (i) investigate and remediate such Hazardous Substance
Condition, if required, as soon as reasonably possible at Lessor's expense, in
which event this Lease shall continue in full force and effect, or (ii) if the
estimated cost to investigate and remediate such condition exceeds twelve (12)
times the then monthly total Base Rent or $100,000, whichever is greater, give
written notice to Lessee within thirty (30) days after receipt by Lessor of
knowledge of the occurrence of such Hazardous Substance Condition of Lessor's
desire to terminate this Lease as of the date sixty (60) days following the date
of such notice. In the event Lessor elects to give such notice of Lessor's
intention to terminate this Lease, Lessee shall have the right within ten (10)
days after the receipt of such notice to give written notice to Lessor of
Lessee's commitment to pay for the excess costs of (a) investigation and
remediation of such Hazardous Substance Condition to the extent required by
Applicable Requirements, over (b) an amount equal to twelve (12) times the then
monthly Base Rent or $100,000, whichever is greater. Lessee shall provide Lessor
with the funds required of Lessee or assurance thereof satisfactory to Lessor in
its sole discretion within thirty (30) days following said commitment by Lessee.
In such event this Lease shall continue in full force and effect, Lessor shall
proceed to make such investigation and remediation as soon as reasonably
possible after the required funds are available. If Lessee does not give such
notice and provide the required funds or assurance thereof within the time
period specified above, this Lease shall terminate as of the date specified in
Lessor's notice of termination.
11.7 Termination-Advance Payments. Upon termination of this
Lease pursuant to this PARAGRAPH 11, provided Lessee is not in default of its
obligations under the Lease, Lessor shall return to Lessee any advance payment
made by Lessee to Lessor and so much of Lessee's Security Deposit as has not
been, or is not then required to be, used by Lessor under the terms of this
Lease.
11.8 Waiver of Statutes. Lessor and Lessee agree that the
terms of this Lease shall govern the effect of any damage to or destruction of
the Premises and the Building with respect to the termination of this Lease and
hereby waive the provisions of any present or future statute to the extent it is
inconsistent herewith.
12. Utilities. Lessee shall pay directly for all utilities and services supplied
to the Premises, including but not limited to electricity, telephone, security,
gas and cleaning of the Premises, together with any taxes thereon. If any such
utilities or services are not separately metered to the Premises or separately
billed to the Premises, Lessee shall pay to Lessor a reasonable proportion to be
determined by Lessor of all such charges jointly metered or billed with other
premises in the Building, in the manner and within the time periods set forth in
PARAGRAPH 4.3(e). However, Lessor, at Lessee's sole cost and expense, may
install submeters to measure Lessee's consumption of utilities at the Premises,
in which event Lessee shall pay for the utilities so consumed by it as shown in
such meters.
13. Assignment and Subletting.
13.1 Lessor's Consent Required.
(a) Lessee shall not voluntarily or by operation of
law assign, transfer, mortgage or otherwise transfer or encumber (collectively,
"assign") or sublet all or any part of Lessee's interest in this Lease or in the
Premises.
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(b) An "assignment" within the meaning of this
PARAGRAPH shall include any direct or indirect transfer of twenty-five (25%)
percent or greater interest (whether stock, partnership or otherwise) of Lessee,
or any permitted sublessee or assignee of this Lease, however accomplished, and
whether in a single transaction or in any series of transactions, whether
related or unrelated; provided however that an assignment by Lessor or any of
its affiliates of an interest in Lessee shall not be considered an "assignment"
requiring consent under this PARAGRAPH.
(c) The involvement of Lessee or its assets in any
transaction, or series of transactions (by way of merger, sale, acquisition,
financing, refinancing, transfer, leveraged buy-out or otherwise), whether or
not a formal assignment or hypothecation of this Lease or Lessee's assets
occurs, which results or will result in a reduction of the Net Worth of Lessee
by an amount equal to or greater than twenty-five percent (25%) of such Net
Worth of Lessee as it was represented to Lessor at the time of the execution and
delivery of this Lease or at the time of the most recent assignment to which
Lessor has consented, or as it exists immediately prior to said transaction or
transactions constituting such reduction, at whichever time said Net Worth of
Lessee was or is greater, shall be considered an assignment of this Lease by
Lessee to which Lessor may withhold its consent. "Net Worth of Lessee" for
purposes of this Lease shall be the net worth of Lessee (excluding any
Guarantors) established under generally accepted accounting principles
consistently applied.
(d) An assignment of Lessee's interest in this Lease
or subletting of the Premises without Lessor's specific prior written consent
shall, at Lessor's option, be a Default curable after notice per PARAGRAPH 14.1,
or a non- curable Breach without the necessity of any notice and grace period.
If Lessor elects to treat such non-consented to assignment or subletting as a
non-curable Breach, Lessor shall have the right to either: (i) terminate this
Lease, or (ii) upon thirty (30) days' written notice ("Lessor's Notice"),
increase the monthly total Base Rent for the Premises to the greater of the then
fair market rental value of the Premises, as reasonably determined by Lessor, or
one hundred ten percent (110%) of the total Base Rent then in effect. Pending
determination of the new fair market rental value, if disputed by Lessee, Lessee
shall pay the amount set forth in Lessor's Notice, with any overpayment credited
against the next installment(s) of Base Rent coming due, and any underpayment
for the period retroactively to the effective date of the adjustment being due
and payable immediately upon the determination thereof. Further, in the event of
such Breach and rental adjustment, (i) any index-oriented rental or price
adjustment formulas contained in this Lease shall be adjusted to require that
the base index be determined with reference to the index applicable to the time
of such adjustment, and (ii) any fixed rental adjustments scheduled during the
remainder of the Lease term shall be increased in the same ratio as the new
rental bears to the Base Rent in effect immediately prior to the adjustment
specified in Lessor's Notice.
13.2 Terms and Conditions Applicable to Assignment and
Subletting.
(a) Regardless of Lessor's consent, any assignment or
subletting shall not (i) be effective without the express written assumption by
such assignee or sublessee of the obligations of Lessee under this Lease, (ii)
release Lessee of any obligations hereunder, or (iii) alter the primary
liability of Lessee for the payment of Base Rent and other sums due Lessor
hereunder or for the performance of any other obligations to be performed by
Lessee under this Lease.
(b) Lessor may accept any rent or performance of
Lessee's obligations from any person other than Lessee pending approval or
disapproval of an assignment. Neither a delay in the approval or disapproval of
such assignment nor the acceptance of any rent for performance shall constitute
a waiver or estoppel of Lessor's right to exercise its remedies for the Default
or Breach by Lessee of any of the terms, covenants or conditions of this Lease.
Lessor shall respond to a request for consent within thirty (30) days after the
request is made, provided that failure to so respond shall be deemed to
constitute a denial of consent.
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(c) The consent of Lessor to any assignment or
subletting shall not constitute a consent to any subsequent assignment or
subletting by Lessee or to any subsequent or successive assignment or subletting
by the assignee or sublessee. However, Lessor may consent to subsequent
sublettings and assignments of the sublease or any amendments or modifications
thereto without notifying Lessee or anyone else liable under this Lease or the
sublease and without obtaining their consent, and such action shall not relieve
such persons from liability under this Lease or the sublease.
(d) In the event of any Default or Breach of Lessee's
obligation under this Lease, Lessor may proceed directly against Lessee, any
Guarantors or anyone else responsible for the performance of the Lessee's
obligations under this Lease, including any sublessee, without first exhausting
Lessor's remedies against any other person or entity responsible therefor to
Lessor, or any security held by Lessor.
(e) Each request for consent to an assignment or
subletting shall be in writing, accompanied by information relevant to Lessor's
determination as to the financial and operational responsibility appropriateness
of the proposed assignee or sublessee, including but not limited to the intended
use and/or required modification of the Premises, if any. Lessee agrees to
provide Lessor with such other or additional information and/or documentation as
may be reasonably requested by Lessor.
(f) Any assignee of, or sublessee under, this Lease
shall, by reason of accepting such assignment or entering into such sublease, be
deemed, for the benefit of Lessor, to have assumed and agreed to conform and
comply with each and every term, covenant, condition and obligation herein to be
observed or performed by Lessee during the term of said assignment or sublease,
other than such obligations as are contrary to or inconsistent with provisions
of an assignment or sublease to which Lessor has specifically consented in
writing.
(g) Lessor, as a condition to giving its consent to
any assignment or subletting, may require that the amount and adjustment
schedule of the rent payable under this Lease be adjusted to what is then the
market value and/or adjustment schedule for property similar to the Premises as
then constituted, as determined by Lessor.
13.3 Additional Terms and Conditions Applicable to Subletting.
The following terms and conditions shall apply to any subletting by Lessee of
all or any part of the Premises and shall be deemed included in all subleases
under this Lease whether or not expressly incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all
of Lessee's interest in all rentals and other income arising from any sublease
made by Lessee, and Lessor may collect such rent and other income and apply same
toward Lessee's obligations under this Lease; provided, however, that until a
Breach shall occur in the performance of Lessee's obligations under this Lease,
Lessee may, except as otherwise provided in this Lease, receive, collect and
enjoy the rents accruing under such sublease. Lessor shall not, by reason of the
foregoing provision or any other assignment of such sublease to Lessor, nor by
reason of the collection of the rents and other income from a sublessee, be
deemed liable to the sublessee for any failure of Lessee to perform and comply
with any of Lessee's obligations to such sublessee under such Sublease. Lessee
hereby irrevocably authorizes and directs any such sublessee, upon receipt of a
written notice from Lessor stating that a Breach exists in the performance of
Lessee's obligations under this Lease, to pay to Lessor the rents and other
charges and income due and to become due under the sublease. Sublessee shall
rely upon any such statement and request from Lessor and shall pay such rents
and other charges and income to Lessor without any obligation or right to
inquire as to whether such Breach exists and notwithstanding any notice from or
claim from Lessee to the contrary. Lessee shall have no right or claim against
such sublessee, or, until the Breach has been cured, against Lessor, for any
such rents and other charges and income so paid by said sublessee to Lessor.
23
(b) In the event of a Breach by Lessee in the
performance of its obligations under this Lease, Lessor, at its option and
without any obligation to do so, may require any sublessee to attorn to Lessor,
in which event Lessor shall undertake the obligations of the sublessor under
such sublease from the time of the exercise of said option to the expiration of
such sublease; provided, however, Lessor shall not be liable for any prepaid
rents, charges or security deposit paid by such sublessee to such sublessor or
for any other prior defaults or breaches of such sublessor under such sublease.
(c) Any matter or thing requiring the consent of the
sublessor under a sublease shall also require the consent of Lessor.
(d) No sublessee under a sublease approved by Lessor
shall further assign its sublease or sublet all or any part of the Premises
without Lessor's prior written consent.
(e) Lessor shall endeavor (but shall not be obligated
to) deliver a copy of any notice of Default or Breach by Lessee to the
sublessee, who shall thereupon have the right to cure the Default of Lessee
within the grace period, if any, specified in such notice. The sublessee shall
have a right of reimbursement and offset from and against Lessee for any such
Defaults cured by the sublessee.
14. Default; Breach; Remedies.
14.1 Default; Breach. Lessee agrees that if an attorney is
consulted by Lessor in connection with a Lessee Default or Breach, $750.00 is a
reasonable minimum sum per such occurrence for legal services and costs in the
preparation and service of a notice of Default, and that Lessor may include the
cost of such services and costs in said notice as rent due and payable to cure
said Default. A "Default" by Lessee is defined as a failure by Lessee to
observe, comply with or perform any of the terms, covenants, conditions or rules
applicable to Lessee under this Lease. A "Breach" by Lessee is defined as the
occurrence of any one or more of the following Defaults, and, where a grace
period for cure after notice is specified herein, the failure by Lessee to cure
such Default prior to the expiration of the applicable grace period, and shall
entitle Lessor to pursue the remedies set forth in PARAGRAPHS 14.2 and/or 14.3:
(a) The vacation of the Premises which continues for
ninety (90) consecutive days without the intention to reoccupy same, or the
abandonment of the Premises which continues for ninety (90)consecutive days.
(b) Except as expressly otherwise provided in this
Lease, the failure by Lessee to make any payment of Base Rent, to make any
payment of other rent or to make any other monetary payment required to be made
by Lessee hereunder, where such failure continues for a period of five (5) days
following written notice thereof by or on behalf of Lessor to Lessee; the
failure by Lessee to provide Lessor with reasonable evidence of insurance or
surety bond required under this Lease; or the failure of Lessee to fulfill any
obligation under this Lease which endangers or threatens life or property, where
such failure continues for a period of five (5) days following written notice
thereof by or on behalf of Lessor to Lessee.
(c) Except as expressly otherwise provided in this
Lease, the failure by Lessee to provide Lessor with reasonable written evidence
(in duly executed original form, if applicable) of (i) compliance with
Applicable Requirements per PARAGRAPH 6.6, (ii) the inspection, maintenance and
service contracts required under PARAGRAPH 8.2(b), (iii) the rescission of an
unauthorized assignment or subletting per PARAGRAPH 13.1, (iv) a Tenancy
Statement per PARAGRAPHS 17 or 37, (v) the subordination or non-subordination of
this Lease per PARAGRAPH 30, (vi) the guaranty of the performance of Lessee's
24
obligations under this Lease if required under PARAGRAPHS 37 or (vii) any other
documentation or information which Lessor may reasonably require of Lessee under
the terms of this Lease, where any such failure continues for a period of ten
(10) days following written notice by or on behalf of Lessor to Lessee.
(d) A Default by Lessee as to the terms, covenants,
conditions or provisions of this Lease, or of the Rules and Regulations, that
are to be observed, complied with or performed by Lessee, other than those
described in PARAGRAPH 14.1(a), (b) or (c), above, where such Default continues
for a period of thirty (30) days after written notice thereof by or on behalf of
Lessor to Lessee; provided, however, that if the nature of Lessee's Default is
such that more than thirty (30) days are reasonably required for its cure, then
it shall not be deemed to be a Breach of this Lease by Lessee if Lessee
commences such cure within said thirty (30) day period and thereinafter
diligently and continuously prosecutes such cure to completion.
(e) The occurrence of any of the following events: (i)
the making by Lessee of any general arrangement or assignment for the benefit of
creditors; (ii) Lessee's becoming a "debtor" as defined in 11 U.S. Code Section
101 or any successor statute thereto (unless, in the case of a petition filed
against Lessee, the same is dismissed within sixty (60) days); (iii) the
appointment of a trustee or receiver to take possession of substantially all of
Lessee's assets located at the Premises or of Lessee's interest in this Lease,
where possession is not restored to Lessee within thirty (30) days; or (iv) the
attachment, execution or other judicial seizure of substantially all of Lessee's
assets located at the Premises or of Lessee's interest in this Lease, where such
seizure is not discharged within thirty (30) days; provided, however, in the
event that any provision of this PARAGRAPH 14.1(e) is contrary to any applicable
law, such provision shall be of no force or effect, and shall not affect the
validity of the remaining provisions.
(f) The discovery by Lessor that any financial
statement of Lessee, any Guarantor, or assignee or sublessee given to Lessor by
Lessee, any Guarantor or any person in connection with assignment or subletting,
was materially false.
(g) If the performance of Lessee's obligations under
this Lease is guaranteed in whole or in part: (i) the death of a Guarantor, (ii)
the termination of a Guarantor's liability with respect to this Lease other than
in accordance with the terms of such guaranty, (iii) a Guarantor's becoming
insolvent or the subject of a bankruptcy filing, (iv) a Guarantor's refusal to
honor the guaranty, or (v) a Guarantor's breach of its guaranty obligation on an
anticipatory breach basis.
14.2 Remedies. If Lessee fails to perform any affirmative duty
or obligation of Lessee under this Lease, within ten (10) days after written
notice to Lessee (or in case of an emergency, without notice), Lessor may at its
option (but without obligation to do so), perform such duty or obligation on
Lessee's behalf, including but not limited to the obtaining of reasonably
required bonds, insurance policies, or governmental licenses, permits or
approvals. The costs and expenses of any such performance by Lessor shall be due
and payable by Lessee to Lessor upon invoice therefor. If any check given to
Lessor by Lessee shall not be honored by the bank upon which it is drawn,
Lessor, at its own option, may require all future payments to be made under this
Lease by Lessee to be made only by cashier's check. In the event of any Breach,
with or without further notice or demand, and without limiting Lessor in the
exercise of any right or remedy which Lessor may have by reason of such Breach,
Lessor may:
(a) Terminate Lessee's right to possession of the
Premises by any lawful means, in which case this Lease and the Term shall
terminate and Lessee shall immediately surrender possession of the Premises to
Lessor. In such event Lessor shall be entitled to recover from Lessee: (i) the
worth at the time of judgment of the unpaid rent which had been earned at the
time of termination; (ii) the worth at the time of judgment of the amount by
which the unpaid rent which would have been earned after termination until the
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time of judgment exceeds the amount of such rental loss that the Lessee proves
could have been reasonably avoided; (iii) the worth at the time of judgment of
the amount by which the unpaid rent for the balance of the Term after the time
of judgment exceeds the amount of such rental loss that the Lessee proves could
be reasonably avoided; and (iv) any other amount necessary to compensate Lessor
for all the detriment proximately caused by Lessee's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom, including but not limited to the cost of recovering
possession of the Premises, expenses of reletting, including necessary
renovation and alteration of the Premises, reasonable attorneys' fees and costs,
and that portion of any leasing commission paid by Lessor in connection with
this Lease applicable to the unexpired Term (but excluding consequential
damages). The worth at the time of judgment of the amount referred to in
provision (iii) of the immediately preceding sentence shall be computed by
discounting such amount at the discount rate of the Federal Reserve Bank of New
York or the Federal Reserve Bank District in which the Premises are located at
the time of the award plus one percent (1%). Efforts by Lessor, if any, to
mitigate damages caused by Lessee's Default or Breach of this Lease shall not
waive Lessor's right to recover damages under this PARAGRAPH. If termination of
this Lease is obtained through the provisional remedy of unlawful detainer,
Lessor shall have the right to recover in such proceeding the unpaid rent and
damages as are recoverable therein, or Lessor may reserve the right to recover
all or any part thereof in a separate suit for such rent and/or damages. If a
notice and grace period required under PARAGRAPH 14.1(b), (c) or (d) was not
previously given, a notice to pay rent or quit, or to perform or quit, as the
case may be, given to Lessee under any statute authorizing the forfeiture of
leases for unlawful detainer shall also constitute the applicable notice for
grace period purposes required by PARAGRAPH 14.1 (b), (c) or (d). In such case,
the applicable grace period under the unlawful detainer statute shall run
concurrently after the one such statutory notice, and the failure of Lessee to
cure the Default within the greater of the two (2) such grace periods shall
constitute both an unlawful detainer and a Breach of this Lease entitling Lessor
to the remedies provided for in this Lease and/or by said statute.
(b) Continue the Lease and Lessee's right to
possession in effect after Lessee's Breach and recover the rent as it becomes
due. Acts of maintenance or preservation, efforts to relet the Premises, or the
appointment of a receiver to protect the Lessor's interest under this Lease,
shall not constitute a termination of the Lessee's right to possession.
(c) Pursue any other remedy now or hereafter available
to Lessor under the laws or judicial decisions of the state wherein the Premises
are located.
(d) The expiration or termination of this Lease and/or
the termination of Lessee's right to possession shall not relieve Lessee from
liability under any indemnity provisions of this Lease as to matters occurring
or accruing during the Term or by reason of Lessee's occupancy of the Premises.
14.3 Inducement Recapture in Event of Breach. Any agreement by
Lessor for free or abated rent or other charges applicable to the Premises, or
for the giving or paying by Lessor to or for Lessee of any cash or other bonus,
inducement or consideration for Lessee's entering into this Lease, all of which
concessions are hereinafter referred to as "Inducement Provisions" shall be
deemed conditioned upon Lessee's full and faithful performance of all of the
terms, covenants and conditions of this Lease to be performed or observed by
Lessee during the Term. Upon the occurrence of a Breach of this Lease by Lessee,
any such Inducement Provision shall automatically be deemed deleted from this
Lease and of no further force or effect, and any rent,other charge, bonus,
inducement or consideration theretofore abated, given or paid by Lessor under
such an Inducement Provision shall be immediately due and payable by Lessee to
Lessor, and recoverable by Lessor, as additional rent due under this Lease,
notwithstanding any subsequent cure of said Breach by Lessee. The acceptance by
Lessor of rent or the cure of the Breach which initiated the operation of this
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PARAGRAPH 14.3 shall not be deemed a waiver by Lessor of the provisions of this
PARAGRAPH unless specifically so stated in writing by Lessor at the time of such
acceptance.
14.4 Late Charges. Lessee hereby acknowledges that late payment
by Lessee to Lessor of rent and other sums due hereunder will cause Lessor to
incur costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed upon
Lessor by the terms of any ground lease, mortgage or deed of trust covering the
Industrial Center or any interest therein. Accordingly, if any installment of
rent or other sum due from Lessee shall not be received by Lessor or Lessor's
designee within ten (10) days after such amount shall be due, then, without any
requirement for notice to Lessee, Lessee shall pay to Lessor a late charge equal
to three percent (3%) of such overdue amount. The parties hereby agree that such
late charge represents a fair and reasonable estimate of the costs Lessor will
incur by reason of late payment by Lessee. Acceptance of such late charge by
Lessor shall neither constitute a waiver of Lessee's Default or Breach with
respect to such overdue amount, nor prevent Lessor from exercising any of the
other rights and remedies granted hereunder. In the event that a late charge is
payable hereunder, whether or not collected, for three (3) consecutive
installments of Base Rent, then notwithstanding PARAGRAPH 4.2 or any other
provision of this Lease to the contrary, Base Rent shall, at Lessor's option,
become due and payable quarterly in advance.
14.5 Breach by Lessor. Lessor shall not be deemed in breach of
this Lease unless Lessor fails within a reasonable time to perform an obligation
required to be performed by Lessor. For purposes of this PARAGRAPH, a reasonable
time shall in no event be less than thirty (30) days after receipt of notice to
Lessor from Lessee; provided, however, that if the nature of Lessor's obligation
is such that more than thirty (30) days after such notice are reasonably
required for its performance, then Lessor shall not be in breach of this Lease
if performance is commenced within such thirty (30) day period and thereafter
diligently pursued to completion. In the event of any act or omission by Lessor
which would give Lessee the right to terminate this Lease or to claim a partial
or total eviction, Lessee shall not exercise any such right (a) until it shall
have given written notice of such act or omission to the holder of any mortgage,
deed of trust or other security instrument encumbering the Industrial Center, or
any interest therein, as herein provided, but only to the extent Lessor has
given Lessee the name and notice address of the holder and (b) until a
reasonable period of time for remedying such act or omission shall have elapsed
following the giving of such notice, provided that following the giving of such
notice, Lessor or said holder shall, with reasonable due diligence, have
commenced and continued to remedy such act or omission or to cause same to be
remedied.
15. Security Deposit. In the event of a change in control of Lessee, Lessee
shall deposit with Lessor upon demand by Lessor the sum of $65,875 (the
"Security Deposit") as security for Lessee's faithful performance of Lessee's
obligations under this Lease. If Lessee fails to pay Base Rent or other rent or
charges due hereunder, or otherwise defaults under this Lease, Lessor may use,
apply or retain all or any portion of the Security Deposit for the payment of
any amount due Lessor or to reimburse or compensate Lessor for any liability,
cost, expense, loss or damage (including attorneys' fees and expenses) which
Lessor may suffer or incur by reason thereof. If Lessor uses or applies all or
any portion of the Security Deposit, Lessee shall within ten (10) days after
written request therefor deposit monies with Lessor sufficient to restore the
Security Deposit to the full amount required by this Lease. Any time the Base
Rent increases during the Term, Lessee shall, upon written request from Lessor,
deposit additional monies with Lessor as an addition to the Security Deposit so
that the total amount of the Security Deposit shall at all times bear the same
proportion to the then current total Base Rent as the initial Security Deposit
bears to the initial total Base Rent. Lessor shall not be required to keep all
or any of the Security Deposit separate from its general accounts. Lessor shall,
27
at the expiration on earlier termination of the Term, full performance by Lessee
of all of its obligations under this Lease and after Lessee has vacated the
Premises, return to Lessee (or, at Lessor's option, to the last assignee, if
any, of Lessee's interest herein), that portion of the Security Deposit not used
or applied by Lessor. Unless otherwise expressly agreed in writing by Lessor, no
part of the Security Deposit shall be considered to be held in trust, to bear
interest or other increment for its use, or to be prepayment for any monies to
be paid by Lessee under this Lease.
16. Brokers' Fees.
(a) The brokers involved in this transaction are NONE,
as "listing broker", and NONE, as "cooperating broker". A "cooperating broker"
is any broker other than the listing broker entitled to a share of any
commission arising as a result of this Lease. Upon execution of this Lease by
both parties, Lessor shall pay to said broker(s) jointly, or in such separate
shares as they may mutually designate in writing, a fee as set forth in a
separate agreement between Lessor and said broker(s).
(b) Lessee and Lessor each represent and warrant to
the other that neither has had any dealings with any person, firm, broker or
finder (other than the person(s), if any, whose names are set forth in this
PARAGRAPH) in connection with the negotiation of this Lease and/or the
consummation of the transaction contemplated hereby, and that no other broker or
other person, firm or entity is entitled to any commission or finder's fee in
connection with said transaction. Lessee and Lessor do each hereby indemnify,
defend and hold the other harmless from and against any costs, expenses,
reasonable attorneys' fees and expenses or liability for compensation or charges
which may be claimed by any such unnamed broker, finder or other similar party
by reason of any dealings or actions of the indemnifying party.
17. Estoppel Certificates and Financial Statements.
17.1 Estoppel Certificates. Each party (a "Responding Party")
shall within ten (10) days after written notice from the other party (the
"Requesting Party") execute, acknowledge and deliver to the Requesting Party a
statement in writing (i) certifying that this Lease is unmodified and in full
force and effect (or, if modified, stating the nature of such modification and
certifying that this Lease, as so modified, is in full force and effect) and the
date to which the rent and other charges are paid and (ii) acknowledging that
there are not, to the Responding Party's knowledge, any uncured defaults on the
part of the Requesting Party, or specifying such defaults if any are known. Any
such statement may be conclusively relied upon by any prospective purchaser or
encumbrancer of the Industrial Center or of the business of Lessee, but Lessor's
delivery of any such certificate shall not be considered as Lessor's consent to
any transaction otherwise prohibited by this Lease.
At the Lessor's option, the failure of Lessee to deliver such
statement within such time shall be a Breach of this Lease, without further
notice to such party, or it shall be conclusive upon Lessee that (i) this Lease
is in full force and effect without modification, except as may be represented
by Lessor, (ii) there are no uncured defaults in Lessor's performance, and (iii)
not more than one month's rent has been paid in advance.
17.2 Financial Statement. If Lessor desires to finance,
refinance, or sell the Industrial Center or any interest therein, or any part
thereof, Lessee and all Guarantors shall deliver to any potential lender or
purchaser designated by Lessor such financial statements of Lessee and such
Guarantors as may be reasonably required by such lender or purchaser, including
but not limited to Lessee's financial statements for the past three (3) years.
All such financial statements shall be received by Lessor and such lender or
purchaser in confidence and shall be used only for the purposes herein set
forth.
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18. Lessor's Liability.
(a) For purposes of this Lease, "Lessor" shall mean the owner
or owners at the time in question of the fee title or a lessee's interest in a
ground lease of the Industrial Center. In the event of a transfer of Lessor's
title or interest in the Industrial Center or in this Lease, Lessor shall
deliver to the transferee or assignee (in cash or by credit) any unused Security
Deposit held by Lessor at the time of such transfer or assignment. Upon such
transfer or assignment and delivery of the Security Deposit, as aforesaid, the
prior Lessor shall be relieved of all liability with respect to the obligations
and/or covenants under this Lease thereafter to be performed by the Lessor.
Subject to the foregoing, the obligations and/or covenants in this Lease to be
performed by the Lessor shall be binding only upon the Lessor as hereinabove
defined.
(b) Lessee shall look solely to Lessor's estate and interest
in the Industrial Center for the satisfaction of any right of Lessee for the
collection of a judgment or other judicial process or arbitration award
requiring the payment of money by Lessor and no other property or assets of
Lessor, Lessor's agents, incorporators, shareholders, officers, directors,
partners, principals (disclosed or undisclosed) or affiliates shall be subject
to levy, lien, execution, attachment or other enforcement procedure for the
satisfaction of Lessee's rights and remedies under or with respect to this
Lease, the relationship of Lessor and Lessee hereunder or under law, or Lessee's
use and occupancy of the Premises or any other liability of Lessor to Lessee.
19. Severability. The invalidity of any provision of this Lease, as determined
by a court of competent jurisdiction, shall in no way affect the validity of any
other provision hereof.
20. Interest on Past-Due Obligations. Any monetary payment due Lessor hereunder,
other than late charges, not received by Lessor within ten (10) days following
the date on which it was due, shall bear interest from the date due at the
annual rate of 10% or, if less, the maximum rate then allowed by law, in
addition to the potential late charge provided for in PARAGRAPH 14.4.
21. Time of Essence. Time is of the essence with respect to the performance of
all obligations to be performed or observed by the Lessee under this Lease.
22. Rent Defined. All monetary obligations of Lessee to Lessor under the terms
of this Lease are deemed to be rent, whether or not the provision of this Lease
creating such monetary obligation shall denominate such obligation as rent. If
this Lease shall not specify when any monetary obligation must be paid, the same
shall be deemed due on demand.
23. Incorporation of other Agreements; Broker Disclaimer. Except for any other
written agreements between Lessor and Lessee this Lease contains all agreements
between the parties with respect to any matter mentioned herein, and no other
prior or contemporaneous agreement or understanding shall be effective. Lessee
represents and warrants that it has made, and is relying solely upon, its own
investigation as to the nature, quality, character and financial responsibility
of Lessor and as to the nature, quality and character of the Premises.
24. Notices.
24.1 Notice Requirements. All notices required or permitted by
this Lease shall be in writing and may be delivered in person (by hand or by
messenger or courier service) or may be sent by certified or registered mail,
return receipt requested, or U.S. Postal Service Express Mail, with postage
prepaid, or other overnight courier or by facsimile transmission during normal
business hours, and shall be deemed sufficiently given if served in a manner
specified in this PARAGRAPH. Either party may by written notice to the other
specify a different address for notice purposes. A copy of all notices required
or permitted to be given to Lessor hereunder shall be concurrently transmitted
to such party or parties at such addresses as Lessor may from time to time
hereafter designate by written notice to Lessee.
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24.2 Date of Notice. Any notice sent by registered or certified
mail, return receipt requested, shall be deemed given on the date of delivery
shown on the receipt card, or if no delivery date is shown, the postmark
thereon. Notices delivered by United States Express Mail or overnight courier
that guarantees next day delivery shall be deemed given twenty-four (24) hours
after delivery of the same to the United States Postal Service or courier. If
any notice is transmitted by facsimile transmission or similar means, the same
shall be deemed served or delivered upon telephone or facsimile confirmation of
receipt of the transmission thereof, provided a copy is also delivered via
delivery or mail. If notice is received on a day other than a business day, it
shall be deemed received on the next business day. A "business day" means any
day other than a Saturday, Sunday or other day on which banks are legally
authorized to be closed in the State of New York.
24.3 A copy of all notices required or permitted to be given to
Lessor hereunder shall be concurrently transmitted to the following parties:
=========================
=========================
and
=========================
=========================
25. Waivers. No waiver by Lessor of the Default or Breach of any term, covenant
or condition hereof by Lessee, shall be deemed a waiver of any other term,
covenant or condition hereof, or of any subsequent Default or Breach by Lessee
of the same or any other term, covenant or condition hereof. Lessor's consent
to, or approval of, any such act shall not be deemed to render unnecessary the
obtaining of Lessor's consent to, or approval of, any subsequent or similar act
by Lessee, or be construed as the basis of an estoppel to enforce the provision
or provisions of this Lease requiring such consent. Regardless of Lessor's
knowledge of a Default or Breach at the time of accepting rent, the acceptance
of rent by Lessor shall not be a waiver of any Default or Breach by Lessee of
any provision hereof. Any payment given Lessor by Lessee may be accepted by
Lessor on account of moneys or damages due Lessor, notwithstanding any
qualifying statements or conditions made by Lessee in connection therewith,
which such statements and/or conditions shall be of no force or effect
whatsoever unless specifically agreed to in writing by Lessor at or before the
time of deposit of such payment.
26. No Right To Holdover. Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or earlier termination of
this Lease. In the event that Lessee holds over in violation of this PARAGRAPH
then the total Base Rent payable from and after the time of the expiration or
earlier termination of this Lease shall be increased to two hundred percent
(200%) of the total Base Rent applicable during the month immediately preceding
such expiration or earlier termination; and such occupancy shall not be a
tenancy from month to month, but shall be upon all the other provisions of the
Lease pertaining to the obligations of Lessee, and all Options, if any, granted
under the terms of this Lease shall be deemed terminated and be of no further
effect. Nothing contained herein shall be construed as a consent by Lessor to
any holding over by Lessee.
27. Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.
28. Covenants and Conditions. All provisions of this Lease to be observed or
performed by Lessee are both covenants and conditions.
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29. Binding Effect; Choice of Law. This Lease shall be binding upon the Parties,
their personal representatives, successors and assigns and be governed by the
laws of the State in which the Premises are located. Any litigation by Lessee
concerning this Lease shall be initiated in the county in which the Premises are
located.
30. Subordination; Attornment
30.1 Subordination. This Lease and any Option or right of first
refusal granted hereby is subordinate to any ground lease, mortgage, deed of
trust, or other hypothecation or security device (collectively, "Security
Device"), now or hereafter placed by Lessor upon the Industrial Center, or any
interest therein, to any and all advances made on the security thereof, and to
all renewals, modifications, consolidations, replacements and extensions
thereof. Lessee agrees that the Lender(s) holding any such Security Device shall
have no duty, liability or obligation to perform any of the obligations of
Lessor under this Lease. If any Lender shall elect to have this Lease and/or any
Option or right of first refusal granted hereby superior to the lien of its
Security Device and shall give written notice thereof to Lessee, this Lease and
such Options or right of first refusal shall be deemed prior to such Security
Device, notwithstanding the relative dates of the documentation or recordation
thereof.
30.2 Attornment. Lessee agrees to attorn to a Lender or any
other party who acquires ownership of the Premises by reason of a foreclosure of
a Security Device, and that in the event of such foreclosure, such new owner
shall not: (i) be liable for any act or omission of any prior lessor or with
respect to events occurring prior to acquisition of ownership, (ii) be subject
to any offsets or defenses which Lessee might have against any prior lessor, or
(iii) be bound by prepayment of more than one month's rent.
30.3 Self-Executing. The agreements contained in this PARAGRAPH
shall be effective without the execution of any further documents; provided,
however, that upon written request from Lessor or a Lender in connection with a
sale, financing or refinancing of the Industrial Center or any part thereof,
Lessee and Lessor shall execute such further writings as may be reasonably
required to separately document any such subordination or non-subordination,
and/or attornment agreement as is provided for herein.
30.4 Non-Disturbance Agreement. Notwithstanding the provisions of
this PARAGRAPH 30, this Lease shall not be subordinate to the lien of any
Security Device, unless the party secured by the Security Device delivers to
Lessee a non-disturbance agreement in the form customarily used by the party.
31. Attorneys' Fees.
(a) Without limiting the other provisions of this
Lease, Lessor shall be entitled to recover from Lessee reasonable attorneys'
fees and all other costs and expenses incurred in the preparation and service of
notice of default, consultations in connection herewith (whether or not an
action or proceeding is subsequently commenced in connection with such default)
and/or prosecution of any action, suit or other proceeding to enforce Lessor's
rights and remedies.
(b) The attorneys' fee award shall not be computed in
accordance with any court fee schedule, but shall be such as to fully reimburse
all attorneys' fees and costs reasonably incurred in good faith.
(c) In the event that an action or proceeding is
instituted by either party to this Lease based upon the alleged failure of the
other party to observe or perform any term or covenant under or by virtue the
terms or provisions of this Lease, the non-prevailing party shall reimburse the
prevailing party for any and all costs and expenses incurred by the prevailing
party in connection with such action or proceeding, including but not limited to
reasonable attorneys' fees, disbursements and court costs. In the event Lessor
shall be the prevailing party, such sum shall be deemed additional rent
31
hereunder and shall be paid by Lessee to Lessor within ten (10) days of
rendition of any xxxx or statement to Lessee therefor. In the event Lessee shall
be the prevailing party, such sum shall be credited (a) first, against Lessee's
then current present rental obligations under this Lease and (b) then, against
Lessee's future rental obligations under this Lease as such shall thereafter
accrue. In the event that (i) sums due to Lessee by Lessor pursuant to this
PARAGRAPH exceed Lessee's remaining rental obligations accruing under this Lease
or (ii) the Term, as extended or otherwise, shall have expired at the time the
prevailing party incurred such costs and expenses, such sums shall be
recoverable as damages. The provisions of this PARAGRAPH shall survive the
expiration or earlier termination of this Lease.
32. Lessor's Access; Showing Premises; Repairs. Lessor and Lessor's agents shall
have the right to enter the Premises at any time, in the case of an emergency,
and otherwise at reasonable times for the purpose of showing the same to
prospective purchasers, lenders, or lessees, and making such alterations,
repairs, improvements or additions to the Premises or to the Building, as Lessor
may reasonably deem necessary. Lessor may at any time place on or about the
Premises or Building any ordinary "For Sale" signs and Lessor may at any time
during the last one hundred eighty (180) days of the term hereof place on or
about the Premises any ordinary "For Lease" signs. All such activities of Lessor
shall be without abatement of rent or liability to Lessee.
33. Auctions. Lessee shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises without first having
obtained Lessor's prior written consent. Notwithstanding anything to the
contrary in this Lease, Lessor shall not be obligated to exercise any standard
of reasonableness in determining whether to grant such consent. The holding of
any auction within the Industrial Center shall constitute a Breach of this
Lease.
34. Signs. Lessee shall not place any sign upon the exterior of the Premises or
the Industrial Center, except that Lessee may, with Lessor's prior written
consent, install (but not on the roof) such signs as are reasonably required to
advertise Lessee's own business so long as such signs are in a location
designated by Lessor and comply with Applicable Requirements and the signage
criteria established for the Industrial Center by Lessor. The installation of
any sign on the Premises by or for Lessee shall be subject to the provisions of
PARAGRAPH 8 (Maintenance, Repairs, Utility Installations, Trade Fixtures and
Alterations). Unless otherwise expressly agreed herein, Lessor reserves all
rights to the use of the roof of the Building, and the right to install
advertising signs on the Building, including the roof, which do not unreasonably
interfere with the conduct of Lessee's business; Lessor shall be entitled to all
revenues from such advertising signs.
35. Termination; Merger. Unless specifically stated otherwise in writing by
Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach
by Lessee, shall automatically terminate any sublease or lesser estate in the
Premises; provided, however, Lessor shall, in the event of any such surrender,
termination or cancellation, have the option to continue any one or all of any
existing subtenancies. Lessor's failure within ten (10) days following any such
event to make a written election to the contrary by written notice to the holder
of any such lesser interest, shall constitute Lessor's election to have such
event constitute the termination of such interest.
36. Consents.
(a) Except for PARAGRAPH 33 (Auctions) or as otherwise
provided herein, wherever in this Lease the consent of a party is required to an
act by or for the other party, such consent shall not be unreasonably withheld
or delayed; this provision shall apply only to those consents expressly referred
to in this Lease and do not apply to any request for a waiver of rights
hereunder or an amendment hereof. If the determination of any arbitration or
court proceeding as to the reasonableness of any decision by Lessor to refuse
such
32
consent is adverse to Lessor, Lessor nevertheless shall not be liable to Lessee
for a breach of Lessor's covenant not to unreasonably withhold such consent, and
the sole remedy of Lessee in such event shall be to proceed as if such consent
of Lessor had been granted (and no money damages shall be allowed), unless
Lessor shall have acted in bad faith. Notwithstanding anything in this PARAGRAPH
or any other provision of this Lease to the contrary, Lessor need not give its
consent, and Lessor shall not be held to a reasonableness standard, where as a
condition to granting its consent Lessor needs to obtain the consent of the
holder of any superior interest in the Industrial Center or any interest
therein, and such other party does not give its consent.
(b) All conditions to Lessor's consent authorized by
this Lease are acknowledged by Lessee as being reasonable. The failure to
specify herein any particular condition to Lessor's consent shall not preclude
the impositions by Lessor at the time of consent of such further or other
conditions as are then reasonable with reference to the particular matter for
which consent is being given.
37. INTENTIONALLY OMITTED
38. Quiet Possession. Upon payment by Lessee of the rent for the Premises and
the observance and performance of all of the covenants, conditions and
provisions on Lessee's part to be observed and performed under this Lease,
Lessee shall have quiet possession of the Premises for the Term subject to all
of the provisions of this Lease.
39. Options.
39.1 Definition. As used in this Lease, the word "Option" has
the following meaning: (a) the right to extend the Term or to renew this Lease
or to extend or renew any lease that Lessee has on other property of Lessor; (b)
the right of first refusal to lease the Premises or the right of first offer to
lease the Premises or the right of first refusal to lease other property of
Lessor or the right of first offer to lease other property of Lessor; (c) the
right to purchase the Premises, or the right of first refusal to purchase the
Premises, or the right of first offer to purchase the Premises, or the right to
purchase other property of Lessor, or the right of first refusal to purchase
other property of Lessor, or the right of first offer to purchase other property
of Lessor.
39.2 Options Personal to Original Lessee. Each Option, if any,
granted to Lessee in this Lease is personal to the original Lessee, and cannot
be voluntarily or involuntarily assigned or exercised by any person or entity
other than said original Lessee while the original Lessee is in full and actual
possession of the Premises and without the intention of thereafter assigning or
subletting. The Options, if any, herein granted to Lessee are not assignable,
either as a part of an assignment of this Lease or separately or apart
therefrom, and no Option may be separated from this Lease in any manner, by
reservation or otherwise.
39.3 Multiple Options. In the event that Lessee has any
multiple Options to extend or renew this Lease, a later option cannot be
exercised unless the prior Options to extend or renew this Lease have been
validly exercised.
39.4 Effect of Default on Options.
(a) Lessee shall have no right to exercise an Option,
notwithstanding any provision in the grant of Option to the contrary: (i) during
the period commencing with the giving of any notice of Default under PARAGRAPH
14.1 and continuing until the noticed Default is cured, or (ii) during the
period of time any monetary obligation due Lessor from Lessee is unpaid (without
regard to whether notice thereof is given Lessee), or (iii) during the time
Lessee is in Breach of this Lease, or (iv) in the event that Lessor has given to
33
Lessee three (3) or more notices of separate Defaults under PARAGRAPH 14.1
during the twelve (12) month period immediately preceding the exercise of the
Option, whether or not the Defaults are cured, or (v) in the event that, prior
to such attempted exercise, there was a Breach resulting in an unlawful detainer
proceeding and satisfaction of the judgment therein, with restoration of
possession.
(b) The period of time within which an Option may be
exercised shall not be extended or enlarged by reason of Lessee's inability to
exercise an Option because of the provisions of PARAGRAPH 39.4(a).
(c) All rights of Lessee under the provisions of an
Option shall terminate and be of no further force or effect, notwithstanding
Lessee's due and timely exercise of the Option, if, after such exercise and
during the Term, (i) Lessee fails to pay to Lessor a monetary obligation of
Lessee for a period of thirty (30) days after such obligation becomes due
(without any necessity of Lessor to give notice thereof to Lessee), or (ii)
Lessor gives to Lessee three (3) or more notices of separate Defaults under
PARAGRAPH 14.1 during any twelve (12) month period, whether or not the Defaults
are cured, or (iii) Lessee commits a Breach of this Lease.
40. Security Measures. Lessor shall have no obligation whatsoever to provide
guard service or other security measures for the Premises. Lessee assumes all
responsibility for the protection of the Premises, Lessee, its agents and
invitees and their property from the acts of third parties.
41. Reservations. Lessor reserves the right, from time to time, to grant,
without the consent or joinder of Lessee, such easements, rights of way, utility
raceways, dedications and transfers of air-rights that Lessor deems necessary,
and to cause the recordation of parcel maps and restrictions, so long as such
easements, rights of way, utility raceways, dedications, transfers of
air-rights, maps and restrictions do not unreasonably interfere with the use of
the Premises by Lessee. Lessee agrees to sign any documents reasonably requested
by Lessor to effectuate any of the foregoing.
42. Performance Under Protest. If at any time a dispute shall arise as to any
amount or sum of money to be paid by one party to the other under the provisions
hereof, the party against whom the obligation to pay the money is asserted shall
have the right to make payment "under protest" and such payment shall not be
regarded as a voluntary payment and there shall survive the right on the part of
said party to institute suit for recovery of such sum. If it shall be adjudged
that there was no legal obligation on the part of said party to pay such sum or
any part thereof, said party shall be entitled to recover such sum or so much
thereof as it was not legally required to pay under the provisions of this
Lease.
43. Authority. If either party hereto is a corporation, trust, or general or
limited partnership, each individual executing this Lease on behalf of such
entity represents and warrants that he or she is duly authorized to execute and
deliver this Lease on its behalf. If Lessee is a corporation, trust or
partnership, Lessee shall, within thirty (30) days after request by Lessor,
deliver to Lessor evidence satisfactory to Lessor of such authority.
44. Offer. Preparation of this Lease by either Lessor or Lessee or Lessor's
agent or Lessee's agent and submission of same to Lessee or Lessor shall not be
deemed an offer to lease. This Lease is not intended to be binding until
executed and delivered by all parties hereto.
45. Amendments. This Lease may be modified only in writing, signed by the
parties in interest at the time of the modification. The parties shall amend
this Lease from time to time to reflect any adjustments that are made to the
Base Rent or other rent payable under this Lease. As long as they do not
materially change Lessee's rights or obligations hereunder, Lessee agrees to
make such reasonable non-monetary modifications to this Lease as may be
reasonably required by an institutional, insurance company or pension plan
Lender in connection with the obtaining of normal financing or refinancing of
the property of which the Premises are a part.
34
46. Multiple Parties. Except as otherwise expressly provided herein, if more
than one person or entity is named herein as either Lessor or Lessee, the
obligations of such multiple parties shall be the joint and several
responsibility of all persons or entities named herein as such Lessor or Lessee.
47. Paragraphs. All references herein to "this PARAGRAPH" refer to the complete
paragraph and not only to the subparagraph in which such reference appears.
48. Waiver of Trial By Jury. LESSOR AND LESSEE DO HEREBY WAIVE TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO
AGAINST THE OTHER AS TO ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY
CONNECTED WITH THIS LEASE, THE RELATIONSHIP OF LESSOR AND LESSEE, LESSEE'S USE
OR OCCUPANCY OF THE PREMISES, OR ANY OTHER CLAIMS OR ANY OTHER STATUTORY REMEDY.
IT IS FURTHER MUTUALLY AGREED THAT IN THE EVENT LESSOR COMMENCES ANY SUMMARY
PROCEEDING FOR NON-PAYMENT OF RENT, LESSEE WILL NOT INTERPOSE AND DOES HEREBY
WAIVE THE RIGHT TO INTERPOSE ANY COUNTERCLAIM OF WHATEVER NATURE OR DESCRIPTION
IN ANY SUCH PROCEEDING.
35
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.
49. Lessor's Representations. Lessor represents to Lessee that Lessor owns the
Building, free and clear of any encumbrances which would have a material and
adverse affect on Lessee's use of the Premises.
The parties hereto have executed this Lease at the place and on the dates
specified above their respective signatures.
Executed at: Executed at:
------------------------ ------------------------
on: on:
--------------------------------- ---------------------------------
By LESSOR: By LESSEE:
REVLON CONSUMER PRODUCTS CORPORATION THE COSMETIC CENTER, INC.
By: By:
--------------------------------- ---------------------------------
Name Printed: Name Printed:
----------------------- -----------------------
Title: Title:
------------------------------ ------------------------------
00
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
On this day of ________ in the year 199__ before me personally appeared
______________________, to me known to be the ___________________ of Revlon
Consumer Products Corporation, the Delaware corporation that executed the within
and foregoing instrument, and acknowledged the said instrument to be the free
and voluntary act and deed of said corporation, for the uses and purposes
therein mentioned, and on oath stated that (s)he was authorized to execute the
said instrument and that the seal affixed is the corporate seal of said
corporation.
---------------------------------
Signature of Corporate Officer
Name:
Title:
Notary Public in and for the
State of New York residing at
-----------------------------
Expiration of Commission: _________
STATE OF ___________)
) ss.:
COUNTY OF __________)
On this day of ________ in the year 199__ before me personally appeared
______________________, to me known to be the ___________________ of The
Cosmetic Center, Inc., the Delaware corporation that executed the within and
foregoing instrument, and acknowledged the said instrument to be the free and
voluntary act and deed of said corporation, for the uses and purposes therein
mentioned, and on oath stated that (s)he was authorized to execute the said
instrument and that the seal affixed is the corporate seal of said corporation.
--------------------------------
Signature of Corporate Officer
Name:
Title:
Notary Public in and for the
State of New York residing at
-----------------------------
Expiration of Commission: _________
37
EXHIBIT A
DESCRIPTION OF PREMISES
EXHIBIT A
1 OF ___ PAGES
EXHIBIT B
INITIAL PARKING PLAN
EXHIBIT B
1 OF 1 PAGES
