Exhibit 10(b)
THIRD AMENDMENT TO LEASE AGREEMENT
AND AGREEMENT
THIS THIRD AMENDMENT TO LEASE AGREEMENT AND AGREEMENT (the "Third
Amendment"), is entered into as of February 27, 2004, by and between XXXXXXXXX
FIELD PARTNERS, LLC, a California limited liability company ("Landlord") and
SPARKS EXHIBITS, LTD., a California corporation ("Tenant"), with reference to
the following facts:
A. Landlord and Tenant are all of the parties to that certain Lease
Agreement dated as of June 29, 1998 (the "Lease"), wherein Landlord leased to
Tenant certain real property located at 0000 Xxxxxxxxx Xxx, Xx Xxxxx,
Xxxxxxxxxx, having located thereon a single industrial building (the "Building")
containing approximately 150,159 square feet of space (the "Original Premises").
B. Subsequent to execution of the Lease, Tenant's business requirements
changed and Tenant requested that Landlord assist Tenant in locating tenants to
lease portions of the Original Premises. In accordance with Tenant's request,
Landlord previously identified G.T.M. Wholesale Liquidators Inc. ("GTM") as a
prospective tenant to lease a portion of the Original Premises comprising
approximately 40,694 square feet (the "GTM Premises") and Landlord and Tenant
previously entered into that certain First Amendment to Lease Agreement and
Agreement dated as of October 31, 2003 (the "First Amendment"), whereby Landlord
and Tenant agreed to mutually cooperate and undertake to pay for and perform
certain obligations with respect to the GTM Premises. The First Amendment was
followed by that certain Second Amendment to, and Partial Termination of, Lease
Agreement, dated as of January 1, 2004 (the "Second Amendment"), whereby
Landlord and Tenant partially terminated the Lease with respect to the GTM
Premises and amended the Lease in other respects. Subsequent to the execution of
the First Amendment and the Second Amendment, Landlord has identified
Professional's Choice Sports Medicine Products, Inc. ("Professional's Choice")
as a prospective tenant to lease a portion of the Original Premises comprising
approximately 37,600 square feet (the "Professional's Choice Premises") and
Professional's Choice is willing to lease the Professional's Choice Premises.
C. Landlord and Professional's Choice have negotiated prospective lease
terms for the Professional's Choice Premises, which lease terms are
substantially as set forth in that certain Irrevocable Offer to Lease dated as
of February __, 2004, in the form attached to this Third Amendment as Exhibit A
(the "Offer"), having appended thereto that certain Lease Agreement dated as of
December 11, 2003 (the "Professional's Choice Lease").
D. Landlord and Tenant desire to memorialize in writing the terms and
conditions upon which Landlord and Tenant will mutually cooperate and undertake
to pay for and construct certain tenant improvements which are required by the
Professional's Choice Lease (the "Professional's Choice Tenant Improvements"),
and upon occupancy by Professional's Choice of the Professional's Choice
Premises and the satisfaction and/or fulfillment of the other terms and
provisions of this Third Amendment, the Lease will be and become partially
terminated with respect to the portion of the Original Premises constituting the
Professional's Choice Premises.
NOW, THEREFORE, in consideration of the mutual covenants, agreements
and undertakings contained in this Third Amendment and the exchange of other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. Unless defined in this Third Amendment, or except as
otherwise expressly provided in this Third Amendment, capitalized terms utilized
in this Third Amendment shall have the meanings ascribed to such terms in the
Lease, or the Professional's Choice Lease, as applicable.
2. Acknowledgement. Tenant and Sparks Exhibits Corp., a Pennsylvania
corporation ("Guarantor"), each hereby acknowledge receipt of the Offer and the
Professional's Choice Lease.
3. Tenant's Contribution; Undertakings Regarding Professional's Choice
Tenant Improvements. The Professional's Choice Lease requires that Landlord
install and construct the Professional's Choice Tenant Improvements. Tenant
agrees to share the aggregate cost of the Professional's Choice Tenant
Improvements, by paying to Landlord the sum of $100,000 ("Tenant's
Contribution"), in accordance with the payment schedule set forth below in this
Section 3. Tenant shall have no responsibility, obligation or liability to pay
to Landlord any sum in excess of Tenant's Contribution on account of the
Professional's Choice Tenant Improvements and concomitantly, Landlord shall have
no responsibility, obligation or liability to return any portion of Tenant's
Contribution to Tenant, irrespective of the overall aggregate cost of the
Professional's Choice Tenant Improvements. Landlord and Tenant each hereby
approve the Professional's Choice Tenant Improvements. Tenant specifically
acknowledges, agrees and understands that the Professional's Choice Tenant
Improvements include, among other things, a demising wall physically separating
the Professional's Choice Premises from the GTM Premises and the Original
Premises, respectively, separate metering of utilities, separate legal access to
the Professional's Choice Premises and other legal and business requirements to
configure the Professional's Choice Premises as separate space from the Original
Premises and the GTM Premises. Concurrently upon the execution of this Third
Amendment, Tenant shall pay to Landlord, in cash the sum of $25,000,
representing a portion of the Tenant's Contribution (the "First Installment"),
and Tenant understands and agrees that Landlord shall not be required to
commence construction and installation of the Professional's Choice Tenant
Improvements unless and until Tenant pays to Landlord the First Installment.
Tenant shall thereafter pay to Landlord the remaining unpaid portion of the
Tenant's Contribution (i.e., $75,000) in three equal installments of $25,000
each which shall be due and payable on that date certain which is three calendar
weeks following the most recent payment by Tenant to Landlord of the prior
installment of the Tenant's Contribution, respectively. Landlord shall undertake
to construct and install, in accordance with the terms and provisions of the
Professional's Choice Lease, the Professional's Choice Tenant Improvements.
Tenant approves Landlord's entry into the Building and the Professional's Choice
Premises in order to install and construct the Professional's Choice Tenant
Improvements, demolition and/or construction activities necessary to configure
the Professional's Choice Premises in accordance with the Professional's Choice
Lease and agrees that Landlord may take or refrain from taking any action in
good faith related to the responsibilities and undertakings of Landlord set
forth in this Third Amendment. Tenant agrees to physically vacate the
Professional's Choice Premises immediately in order to allow Landlord to perform
its undertakings pursuant to this Section 3 and further agrees to conduct its
operations in such a manner that it will not unreasonably interfere with the
performance by Landlord of its undertakings set forth in this Section 3.
4. Agreement to Partially Terminate Lease; Effectiveness. Landlord
agrees with Tenant that, (i) upon payment in full by Tenant of Tenant's
Contribution in accordance with the provisions of Section 3 of this Third
Amendment, (ii) actual occupancy by Professional's Choice of the Professional's
Choice Premises on a rent paying basis currently scheduled for April 1, 2004,
and (iii) compliance, in full, with all other terms and conditions set forth in
this Third Amendment, the Lease shall, with no further action of the parties, be
terminated with respect only to the portion of the Lease which pertains to the
Professional's Choice Premises. Accordingly, the portion of the Lease pertaining
to all of the Original Premises except the GTM Premises and the Professional's
Choice Premises shall remain extant and in full force and effect, in accordance
with its terms, unless and until Landlord and Tenant shall otherwise agree in
writing. Landlord and Tenant shall execute a mutually acceptable written
instrument acknowledging partial termination of the Lease in accordance with the
provisions set forth above in this Section 4 and agreeing to such amendments and
modifications of the Lease as are necessary and appropriate to modify Tenant's
proportionate share of shared costs and expenses as provided in the Lease, and
other matters, if any, as Landlord and Tenant shall mutually agree.
5. Amendment; Confirmation; Interpretation. To the extent, but only to
the extent, necessary to give effect to the First Amendment and Second Amendment
previously entered into between Landlord and Tenant and this Third Amendment,
the Lease is deemed amended and modified. Except to the limited extent amended
and modified hereby, the Lease is ratified and confirmed in all respects and
remains extant and in full force and effect.
6. No Agency; Leasing Commissions and Landlord's Attorneys' Fees.
Landlord and Tenant hereby acknowledge and agree that there is no agency
relationship between Landlord and Tenant, either created by this Third Amendment
or otherwise. Landlord shall not be entitled to any leasing commissions in
connection with locating Professional's Choice as a tenant for the
Professional's Choice Premises, or otherwise in connection with the
Professional's Choice Lease. Subject to the last sentence below of this Section
6 of this Third Amendment, Tenant shall not be responsible or liable for any
leasing commissions or Landlord's attorneys' fees and costs related to the
Professional's Choice Lease or the Landlord-Tenant transactions reasonably
related thereto, including without limitation, negotiation and preparation of
this Third Amendment and fees and costs expected to be incurred by Landlord in
connection with negotiation and preparation of the instrument partially
terminating the Lease referred to in Section 4 of this Third Amendment, it being
the intention of Landlord and Tenant that, except for responsibility and
liability for any breaches of this Third Amendment, Tenant shall have no
responsibility, liability or obligation in excess of the Tenant's Contribution
in connection with the Professional's Choice Lease. Notwithstanding anything in
the preceding sentence to the contrary, Tenant shall, in addition to Tenant's
Contribution, reimburse Landlord for 50 percent of Landlord's attorneys' fees
and costs related to the negotiation and preparation of this Third Amendment and
fees and costs incurred by Landlord in connection with negotiation and
preparation of the instrument partially terminating the Lease referred to in
Section 4 of this Third Amendment, in the event, but only in the event, that the
Lease does not become partially terminated with respect to the Additional
Premises (as that term is defined in that certain Fourth Amendment to, and
Agreement to Partially Terminate, Lease Agreement, which is to be executed by
Landlord and Tenant substantially concurrent to the execution of this Third
Amendment (the "Fourth Amendment").
7. Indemnification.
7.1 By Tenant. Tenant hereby agrees to indemnify and hold
Landlord, and the property and assets of Landlord, harmless, from and against
any and all liabilities, damages, losses, costs, expenses, attorneys' fees and
claims arising out of, resulting from or related to any breach or default by
Tenant in the payment or performance of any of Tenant's agreements, promises,
undertakings, obligations, responsibilities and/or liabilities under and by
reason of this Third Amendment, including specifically but not by way of
limitation, Tenant's failure to vacate the Professional's Choice Premises and/or
otherwise to affect adversely Landlord's efforts to perform its responsibilities
and obligations respecting construction and installation of the Professional's
Choice Tenant Improvements.
7.2 By Landlord. Landlord hereby agrees to indemnify and hold
Tenant, and the property and assets of Tenant, harmless, from and against any
and all liabilities, damages, losses, costs, expenses, attorneys' fees and
claims arising out of, resulting from or related to any breach or default by
Landlord in the payment or performance of Landlord's agreements, promises,
undertakings, obligations, responsibilities and/or liabilities under and by
reason of this Third Amendment.
8. General Provisions.
8.1 Further Assurances. Each party hereto agrees to perform
any further acts and execute and deliver any further documents that may be
reasonably necessary to effectuate the provisions of this Third Amendment.
8.2 Counterparts; Fax Signatures. This Third Amendment may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
Facsimile signatures shall have the same force and effect as original
signatures.
8.3 Severability. If any provisions, or portions thereof, of
this Third Amendment or the application thereof are held to be unenforceable or
invalid by any court of competent jurisdiction, the remainder of this Third
Amendment shall not be affected thereby and to this end only the provisions of
this Third Amendment are declared severable.
8.4 Successors and Assigns. Subject to the provisions of
Section 8.10 of this Third Amendment, all terms of this Third Amendment shall be
binding on and shall inure to the benefit of and be enforceable by the parties
hereto and their respective heirs, legal representatives, successors and
assigns.
8.5 Governing Law; Venue. This Third Amendment shall be
governed by, construed and enforced in accordance with the laws of the State of
California and is to be performed in San Diego County, California and any action
or other proceeding brought to enforce or interpret this Third Amendment shall
be brought in San Diego County, California.
8.6 Waiver. No waiver of any of the provisions of this Third
Amendment shall be deemed, or shall constitute, a waiver of any other provision,
whether or not similar, nor shall any waiver constitute a continuing waive. No
failure to enforce any right or provision hereunder shall preclude or affect the
later enforcement of such right or provision. No waiver shall be binding unless
executed by the party making the waiver.
8.7 Time. Time is of the essence with respect to the
performance by each party of its rights and obligations hereunder.
8.8 Attorneys' Fees. In the event any attorney is employed by
either party to this Third Amendment with regard to any legal action,
arbitration or other proceeding brought by either party for the enforcement or
interpretation of this Third Amendment, or because of any alleged dispute,
breach, default, or misrepresentation involving any provisions of this Third
Amendment, the party prevailing in any such proceeding shall be entitled to
recover reasonable attorneys' fees and other costs and expenses incurred, in
addition to any other relief to which it may be entitled.
8.9 No Joint Venture. The parties hereto are independent of
one another and no joint venture, partnership or other collaborative venture is
intended or implied by the provisions of this Third Amendment.
8.10 Assignment. Neither party may assign this Third Amendment
nor any of its respective rights, liabilities and obligations under this Third
Amendment without the prior written consent of the other party, which may be
given or withheld in such party's sole and unreviewable discretion.
8.11 Entire Agreement. This Third Amendment, together with the
First Amendment, the Second Amendment and the Lease, constitutes the entire
agreement between the parties pertaining to the subject matter contained in this
Third Amendment and supersedes all prior and contemporaneous agreements,
representations and understandings of the parties with respect thereto. There
are no representations, warranties, agreements or understandings, express or
implied, written or oral between the parties hereto relating to the subject
matter of this Third Amendment which are not fully expressed herein, in the
First Amendment, the Second Amendment and/or the Lease.
8.12 Amendment. No supplement, amendment, modification,
discharge or change of this Third Amendment shall be binding unless executed in
writing by all of the parties.
8.13 Authority. If a party to this Third Amendment is a
corporation or other entity which is not a natural person, each individual
executing this Third Amendment on behalf of said corporation or other entity
represents and warrants that he is duly authorized to execute and deliver this
Third Amendment on behalf of said corporation or other entity in accordance with
a duly adopted resolution of the board of directors of such corporation or the
governing authority of such other entity or in accordance with the bylaws of
such corporation or governing instrument(s) of such other entity, and that this
Third Amendment is binding upon such corporation or other entity in accordance
with its terms.
IN WITNESS WHEREOF, the parties have executed this Third Amendment as
of the date first set forth above.
Landlord: Tenant:
XXXXXXXXX FIELD PARTNERS, LLC SPARKS EXHIBITS, LTD.,
a California limited liability company a California corporation
By: ____________________________ By: ________________________
[Signature] [Signature]
____________________________ ________________________
[Print Name and Title] [Print Name and Title
