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Exhibit 10(k)
L E A S E
This Lease is made November 9, 1995, between XXXX XXXXXX XXXXXXXXXXX referred to
hereafter as "LANDLORD", and AMSCAN INC., a New York corporation, referred to
hereafter as "TENANT".
R E C I T A L S
This Lease is made with reference to the following facts and objectives:
A. Landlord is the owner of that certain Real Property described in Exhibit "A",
and is currently in the process of constructing certain additional improvements
thereon pursuant to the terms of that certain Construction Agreement dated May
25, 1995 between HEDLEY BROTHERS CONSTRUCTION CO., as General Contractor, and
LANDLORD, as Owner. The Real Property and improvements previously constructed
thereon are subject to a lease between LANDLORD and TENANT dated December 7,
1984, and extended by modification dated March 1, 1995. The additional
improvements being constructed, consisting of a 98,680 more or less square foot
additional warehouse at 28381 Xxxxxxx Xxxxxx and more fully described in Exhibit
"A" hereto, are hereinafter referred to as the "Premises."
B. TENANT desires to lease from LANDLORD and LANDLORD desires to lease to TENANT
the Premises. WHEREFORE, the parties hereto hereby covenant and agree as
follows:
1. Demise. LANDLORD leases to TENANT and TENANT leases from LANDLORD the
Premises.
2. Term. The term shall be coterminous with the December 7, 1984 lease -
approximately fourteen years, two months, commencing on the earlier of: (a) the
first day of the month following
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the month in which a Certificate of Occupancy with respect to the entirety of
the Premises is issued, (b) January 1, 1996 or (c) the date on which Tenant
first occupies any portion of the Premises. The parties shall execute an
amendment to this Lease stating the exact commencement date when the same has
been ascertained.
3. Possession Prior to the Commencement of the Term. LANDLORD shall notify
TENANT of the expected date for substantial completion of the Premises at least
sixty (60) days before said date. Following such notification, TENANT shall be
entitled to enter upon the Premises for purposes of equipping and fixturing the
Premises so long as such entry does not interfere with LANDLORD or Landlord's
Contractor. If TENANT enters the Premises as provided in this paragraph, all of
the provisions of the Lease shall be in full force and effect except the Rent
Provision.
4. Monthly Rental.
(a) During the initial year of the term, TENANT shall pay to LANDLORD as
monthly rent, without deduction, setoff, prior notice, or demand, the sum of
Fifty-Six Thousand, Two Hundred Forty-Seven Dollars and Sixty Cents ($56,247.60)
per month in advance on the first (1st) day of each month. Such rental shall be
prorated for any partial month which may exist at the commencement of the term.
(b) Beginning one (1) year following commencement of the term, and continuing
on each succeeding anniversary of the commencement of the term, the monthly
rental paid by TENANT shall be increased by Five (5%) percent over the monthly
rental paid by TENANT during the immediately preceding year of the term.
5. Personal Property Taxes. TENANT shall pay before delinquency all taxes,
assessments, license fees, and other charges (taxes) that are levied and
assessed against TENANT's personal property installed or located in or on the
Premises, and that become payable during the term. TENANT shall furnish LANDLORD
with satisfactory evidence of these payments.
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6. Real Property Taxes. TENANT shall pay all real property taxes and general and
special assessments (real property taxes) levied and assessed against the
Premises. TENANT shall pay the real property taxes not later than ten (10) days
before the taxing authority's delinquency date and shall furnish LANDLORD with
satisfactory confirmation of such payment. TENANT's obligations to pay real
property taxes shall be prorated on the basis of a 365-day year to account for
any fractional portion of a fiscal tax year included in the term at its
commencement and expiration.
7. Substitute Taxes. If at any time during the term of the Lease the laws
concerning the methods of real property taxation prevailing at the commencement
of the term are changed so that a tax or excise on rents or any other such tax,
however described, is levied or assessed against LANDLORD as a direct
substitution in whole or in part for any real property taxes, TENANT shall pay
before delinquency (but only to the extent that it can be ascertained that there
has been a substitution and that as a result TENANT has been relieved from the
payment of real property taxes it would otherwise have been obligated to pay)
the substitute tax or excise on rents. TENANT's share of any tax or excise on
rent shall be substantially the same as, and a substitute for, the payment of
such real property taxes as provided in this Lease.
8. Use.
(a) TENANT shall use the Premises for purposes of operating a paper products
manufacturing and warehousing facility, and related purposes, and for no other
use without LANDLORD's express written consent, which shall not be unreasonably
denied.
(b) TENANT shall not do, bring or keep anything in or about the Premises that
will cause a cancellation of any insurance covering the Premises, or any portion
thereof.
(c) TENANT shall comply with all laws, rules, regulations, and ordinances
adopted by any governmental or quasigovernmental entity having jurisdiction
concerning the Premises or
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TENANT'S use of the Premises.
9. Maintenance. TENANT, at its sole cost and expense, shall be responsible for
maintaining all portions of the Premises. TENANT expressly waives the provisions
of Sections 1941 and 1942 of the Civil Code.
10. Alterations. TENANT shall not make any alterations to the Premises without
LANDLORD's consent, which shall not be unreasonably denied. Any alterations made
shall remain on and be surrendered with the Premises on expiration or
termination of the term. If TENANT makes any alterations to the Premises as
provided above, the alteration shall not be commenced until fifteen (15) days
after LANDLORD has received notice from TENANT stating the date that the
installation of the alteration is to commence so that LANDLORD can post and
record an appropriate Notice of Nonresponsibility.
11. Mechanic's Liens. TENANT shall pay all costs for construction done by it or
caused to be done by it on the Premises. TENANT shall keep the Premises free and
clear of all mechanic's liens resulting from construction done by or for TENANT.
12. Utilities and Services. TENANT shall make all arrangements for and pay for
all utilities and services furnished to or used by it and connection charges
related to such utilities and services, including without limitation, gas,
electricity, water, telephone service, and trash collection.
13. Indemnity and Exculpation; Insurance.
(a) LANDLORD shall not be liable to TENANT for any damage to TENANT or
TENANT's property from any cause. TENANT waives all claims against LANDLORD for
damage to person or property arising for any reason.
(b) TENANT shall defend, indemnify and hold LANDLORD harmless from any and
all costs or expenses, including reasonable attorneys' fees, arising out of any
damage to any
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person or property occurring in, on or about the Premises.
(c) TENANT, at TENANT's sole cost, shall maintain on all of TENANT's personal
property, TENANT's improvements and alterations in, on or about the Premises, a
policy of standard fire, flood and extended coverage insurance with vandalism
and malicious mischief endorsement to the extent of at least One Hundred Percent
(100%) of full replacement value. The proceeds from any such policy shall be
used by TENANT for the replacement of personal property or the restoration of
TENANT's improvements or alterations. Evidence of such insurance shall be
supplied to LANDLORD.
(d) TENANT, at TENANT's sole cost, shall maintain on the Premises a policy of
standard fire, flood and extended coverage insurance, with vandalism and
malicious mischief endorsements, to the extent of at least One Hundred Percent
(100%) of full replacement value. The insurance policy shall be issued in the
names of LANDLORD, LANDLORD's Lender and TENANT, as their interests appear. The
proceeds from any such policy shall be paid to and shall belong to LANDLORD, but
shall be made available to TENANT for utilization pursuant to the terms of
Paragraph 14 hereof. In case this Lease is terminated, the insurance policy and
all rights under it or the insurance proceeds shall be assigned to LANDLORD at
LANDLORD's election. Evidence of such insurance shall be supplied to LANDLORD.
The "Full Replacement Value" of the Premises shall be determined by the company
issuing the fire insurance policy at the time the policy is initially obtained.
Not more frequently than annually, either party shall have the right to notify
the other party that it elects to have the replacement value redetermined. Any
such redetermination shall be made promptly by the insurance company insuring
the Premises in accordance with the Rules and Practices of the Board of Fire
Underwriters, or a like board recognized and generally accepted by the insurance
company, and each party shall be promptly notified of the results by the
company. The fire insurance policy shall be adjusted according to the
redetermination made by the insurance company.
(e) TENANT, at its cost, shall maintain insurance insuring that the monthly
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payable hereunder will be paid to LANDLORD for a period of up to six (6)
months in the event that the premises are destroyed or rendered inaccessible by
a risk insured against by policy of standard fire, flood and extended coverage
insurance, with vandalism and malicious mischief endorsements.
(f) TENANT, at TENANT's sole cost, shall maintain public liability insurance
insuring LANDLORD against damage for injuries occurring in connection with the
use of the Premises in the amount of Five Million Dollars ($5,000,000.00) single
limit coverage. Evidence of such insurance shall be supplied to LANDLORD.
(g) All policies of insurance described herein shall:
i. be issued by insurance companies authorized to do
business in the State of California, with a financial
rating of at least an A Status as rated in the most
recent edition of Best's Insurance Reports;
ii. be issued as a primary policy;
iii. contain an endorsement requiring not less than thirty
(30) day written notice from the insurance company to
LANDLORD before any cancellation, expiration or
modification in the coverage, scope or amount of any
policy.
14. Destruction.
(a) If, during the term hereof, the Premises or any part thereof are
totally or partially destroyed from any cause whatsoever, whether or not covered
by insurance carried pursuant to this Lease, rendering the Premises totally or
partially inaccessible or unusable, TENANT shall restore the Premises to
substantially the same condition as they were in immediately before destruction
within six (6) months from the date of such destruction. Such destruction shall
not terminate this Lease. Tenant shall be entitled to utilize the proceeds of
any insurance carried pursuant to the terms of this Lease for such purposes.
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(b) TENANT waives the provisions of Civil Code Section 1932(2), and
Civil Code Section 1933(4), with respect to any destruction of the Premises.
15. Condemnation.
(a) Definitions.
i. "Condemnation" means (a) the exercise of any governmental
power whether by legal proceeding or otherwise by a condemnor or (b) a voluntary
sale or transfer by LANDLORD to a condemnor while any proceedings for
condemnation are pending.
ii. "Date of Taking" means the date the condemnor has the
right to possession of the property being condemned.
iii. "Award" means all compensation, sums or anything of value
awarded, paid or received on a total or partial
condemnation.
iv. "Condemnor" means any public or quasipublic authority or
private corporation or individual having the power of
condemnation.
(b) If, during the term hereof, there is any taking of all or any part
of the building, other improvements or land constituting the Premises or any
interest in this Lease, by condemnation, the rights and obligations of the
parties shall be determined as provided herein.
(c) If the Premises are totally taken by condemnation, this Lease shall
terminate on the date of taking.
(d) If any portion of the Premises is taken by condemnation, this Lease
shall remain in effect, except that TENANT may elect to terminate this Lease if
Fifty Percent (50%) or more of the total number of square feet in the Premises
are taken. It TENANT elects to terminate this Lease, TENANT must exercise
TENANT's right to terminate pursuant to this paragraph by giving
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written notice to LANDLORD within thirty (30) days after the nature and the
extent of the taking have been finally determined. TENANT shall also notify
LANDLORD of the date of termination, which date shall not be earlier than thirty
(30) days nor more than ninety (90) days after the date that TENANT has notified
LANDLORD of TENANT's election to terminate; except that this Lease shall
terminate on the date of taking if the date of taking falls on a date before the
date of termination as designated by TENANT. If TENANT does not terminate this
Lease within the aforesaid period, this Lease shall continue in full force and
effect.
(e) If any portion of the Premises is taken by condemnation and this
Lease remains in full force and effect, then on the date of taking, the rental
shall be reduced by an amount that is in the same ratio to the unreduced rental
as the total number of gross square feet in the building area of the Premises
taken bears to the total number of gross square feet in the building area of the
Premises immediately before the date of taking.
(f) If there is a partial taking of the Premises and this Lease remains
in full force and effect, LANDLORD, at LANDLORD's option, may restore the
Premises. In the event that LANDLORD elects to restore the Premises, the
reduction in rental provided under sub-paragraph (e.) hereof shall terminate as
of the date of completion of restoration.
(g) The award shall belong to and be paid entirely to LANDLORD, except
that TENANT shall receive from the award any sum attributable by the award to
the taking of personal property located on the Premises and belonging to TENANT.
16. Assignment. TENANT shall not assign or encumber TENANT's interest in this
Lease or in the Premises, or sublease all or any part of the Premises, or allow
any other person or entity (except TENANT's authorized representatives) to
occupy or use all or any part of the Premises, without obtaining LANDLORD's
express written consent. Any assignment, encumbrance or sublease without
LANDLORD's consent shall be voidable and, at LANDLORD's election, shall
constitute a
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further waiver of the provisions of this paragraph.
17. Default.
(a) The occurrence of any one of the following shall constitute a
default by TENANT:
(i) Failure to pay rent when due;
(ii) Failure to perform any other provisions of this Lease
if the failure to perform is not cured within ten
(10) days after notice has been given to TENANT. If
the default cannot reasonably be cured within ten
(10) days, TENANT shall not be in default of this
Lease if TENANT commences to cure the default within
the ten (10) day period and diligently and in good
faith continues to cure the default until cure is
accomplished.
(iii) The Levy of a Writ of Attachment or execution on this
Lease, the Premises or any portion thereof which is
not released (by bond or otherwise) within fifteen
(15) days.
(iv) The appointment of a receiver with authority to take
possession of the Premises or any part thereof, in a
proceeding or action to which TENANT is a party.
Notices given under this paragraph shall specify the alleged default and the
applicable Lease provisions and shall demand that TENANT perform the provisions
of this Lease or pay the rent that is in arrears, as the case may be, within the
applicable period of time, or quit the Premises. No such notice shall be deemed
a forfeiture or a termination of this Lease unless LANDLORD so elects in the
notice.
(b) In the event that TENANT defaults under this Lease, LANDLORD shall
have all rights and remedies available to LANDLORD under law and the exercise by
LANDLORD of one right or remedy shall not preclude the exercise by LANDLORD of
any other right or remedy.
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(c) In the event of any default by TENANT, then LANDLORD, in addition
to any other rights or remedies he may have, shall have the immediate right of
re-entry and may remove all persons and property from the Premises.
(d) If TENANT defaults and abandons the Premises before the end of the
term, or if TENANT's right to possession is terminated by LANDLORD because of a
default, then in either such case, LANDLORD may recover from TENANT all damages
suffered by LANDLORD as the result of TENANT's failure to perform TENANT's
obligations hereunder, including, but not restricted to, the worth at the time,
of the award of the amount by which the rent then unpaid hereunder for the
balance of the Lease term exceeds the amount of such rental loss for the same
period which TENANT proves could be reasonably avoided by LANDLORD.
18. LANDLORD's Entry on Premises. LANDLORD, or LANDLORD's authorized
representatives, shall have the right to enter the Premises at all reasonable
times for any reasonable purpose.
19. Subordination. This Lease is and shall be subordinate to any encumbrance now
of record or recorded after the date of this Lease affecting the building, other
improvements, and land constituting the Premises. Such subordination is
effective without any further act of TENANT. TENANT shall from time to time,
upon request from LANDLORD, execute and deliver any documents or instruments
that may be required by lender to effect any subordination. If TENANT fails to
execute and deliver any such documents or instruments, TENANT irrevocably
constitutes and appoints LANDLORD as TENANT's special attorney-in-fact to
execute and deliver any such documents or instruments.
20. Notice. Any notice, demand, request, consent, approval or communication that
either party desires or is required to give to the other party, or any other
shall be in writing-and either served personally or sent by prepaid first-class
mail. Any such notice, demand, request, consent, approval or communication shall
be addressed to the other party at the address set forth below. Either party
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may change its address by notifying the other party of the change of address.
Notice shall be deemed communicated within forty-eight (48) hours from the time
of mailing if mailed as provided in this paragraph.
LANDLORD: TENANT:
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XXXX XXXXXX XXXXXXXXXXX AMSCAN INC
C/O AMSCAN INC. 0 Xxxx Xxxx
2 Macy Road XX Xxx 000
XX Xxx 000 Xxxxxxxx, Xxx Xxxx 00000
Xxxxxxxx, Xxx Xxxx 00000
21. Waiver. No delay or omission in the exercise of any right or remedy of
LANDLORD with respect to any default by TENANT shall impair such a right or
remedy or be construed as a waiver. The receipt and acceptance by LANDLORD of
delinquent rent shall not constitute a waiver of any other default, but shall
constitute only a waiver of timely payment for the particular rent payment
accepted. LANDLORD's consent to or approval of any act by TENANT requiring
LANDLORD's consent to or approval shall not constitute consent to or approval of
any subsequent act of TENANT. Any waiver by LANDLORD of any default must be in
writing and shall not be a waiver of any other default concerning the same or
any other provision of the Lease.
22. Attorneys' Fees. If either party becomes a party to any litigation
concerning this Lease, the Premises, the building or other improvements on the
Premises or the land constituting a part of the Premises, by reason of any act
or omission of the other party or its authorized representatives, and not by any
act or omission of the party that becomes a party to that litigation or any act
or omission of its authorized representatives, then the party that causes the
other party to become involved in the litigation shall be liable to that party
for reasonable attorneys' fees and costs incurred by it in litigation.
If either party commences an action against the other party arising out
of or in connection
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with this Lease, the prevailing party shall be entitled to have and recover from
the losing party reasonable attorneys' fees and costs of suit.
23. Surrender of Premises. On expiration of this Lease, TENANT shall surrender
to LANDLORD the Premises and all TENANT's improvements and alterations in good
condition, reasonable wear and tear excepted. If TENANT fails to surrender the
Premises to LANDLORD as aforesaid, TENANT shall hold LANDLORD harmless from all
damages resulting from TENANT's failure to surrender the Premises, including
without limitation, claims made by a succeeding tenant resulting from TENANT's
failure to surrender the Premises.
24. Time of Essence. Time is of the essence of each provision of this Lease; all
provisions relating to time shall be strictly construed.
25. Successors. This Lease shall be binding on and inure to the benefit of the
parties and their successors; provided, however, that this provision is
expressly subject to the prohibition against assignment and subleasing contained
herein.
26. Integration. This Lease contains all of the agreements of the parties. No
party has entered into this Lease in reliance upon any representation not
contained herein.
27. Captions. The captions of this Lease shall have no effect on its
interpretation.
28. Joint and Several Obligations. "Party" shall mean LANDLORD or TENANT. If
more than one person or entity is LANDLORD or TENANT, the obligations imposed on
that party shall be joint and several.
EXECUTED the day and year first above written at Harrison, New York.
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LANDLORD: TENANT:
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AMSCAN INC., A New York Corporation
/s/XXXX XXXXXX XXXXXXXXXXX
--------------------------
XXXX XXXXXX XXXXXXXXXXX
By: /s/XXXX XXXXXX
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Its Vice President
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DESCRIPTION OF PREMISES
The premises commonly known as, Temecula, California, and more particularly
described as Parcels 17, 18 and 19, inclusive, and Parcel 22 of Parcel Map No.
12549, as shown by Parcel Map on file in Book 74, Pages 84 through 89,
inclusive, of Parcel Maps, Records of Riverside County, California.
EXHIBIT "A"
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RECORDING REQUESTED BY
AND WHEN RECORDED MAIL
TO:
MEMORANDUM OF LEASE
This Memorandum of Lease is made and entered into by and
between XXXX XXXXXX XXXXXXXXXXX, hereinafter referred to as "LANDLORD", and
AMSCAN INC., a New York corporation, hereinafter referred to as "TENANT", to
witness that:
LANDLORD hereby leases to TENANT for a term of ten (10) years,
commencing on the earlier of: (a) The first day of the month following-the month
in which a Certificate of Occupancy with respect to the entirety of the Premises
is issued, (b) July 1, 1985, or (c) the date on which TENANT first occupies any
portion of the Premises, on the terms and conditions set forth in that certain
case by and between the parties hereto dated 12/07/84 all the terms and
conditions of which Lease are made a part hereof as though fully set forth
herein, all those certain Premises in the County of Riverside, State of
California, described in Exhibit "A" which is attached hereto and incorporated
herein by this reference, including any improvements to be constructed thereon.
EXECUTED on the 7 day of December, 1984 at Westchester, New
York.
LANDLORD:
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XXXX XXXXXX XXXXXXXXXXX
TENANT: AMSCAN, INC., A New York Corporation,
By:
---------------------------------
Its
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XXXXX XX XXX XXXX
XXXXXX XX XXXXXXXXXXX
Xx before me, the undersigned, a Notary Public in and for said
State, personally appeared XXXX XXXXXX XXXXXXXXXXX known to me to be the person
whose name is subscribed to the within instrument, and acknowledged to me that
he executed the same.
WITNESS my hand and official seal.
-----------------------------------
Notary Public in and for said State
STATE OF NEW YORK
COUNTY OF WESTCHESTER
On , before me, the undersigned, a Notary Public in and for
said State, personally appeared Xxxxxx Xxxxxxxxxxx, known to me to be the
secretary of AMSCAN, INC., a New York corporation, the corporation that executed
the within instrument, known to me to be the person who executed the within
instrument, on behalf of the corporation therein named, and acknowledged to me
that such corporation executed the same. WITNESS my hand and official seal.
-----------------------------------
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DESCRIPTION OF PREMISES
The premises commonly known as 00000 Xxxxxx Xxxxxxxxxx Xxxx,
Xxxxxx Xxxxxxxxxx, Xxxxxxxxxx 00000, and more particularly described as Parcels
17, 18 and 19, inclusive, and Parcel 22 of Parcel I-lap No. 12549, as shown by
Parcel Map on file in Book 74, Pages 84 through 89, inclusive, of Parcel Maps,
Records of Riverside County, California.
EXHIBIT "A"
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AMENDMENT TO LEASE
WHEREAS: XXXX XXXXXX XXXXXXXXXXX and AMSCAN INC. are the LANDLORD and TENANT,
respectively, in a lease (the "LEASE") for the rental of property at 28381
XXXXXXX XXXXXX XXXXXXXXX, XXXXXXXX, XXXXXXXXXX 00000, dated November 9, 1995;
WHEREAS: The TERM of the Lease is 14 YEARS, TWO MONTHS, terminating on February
28, 2010;
WHEREAS: The parties desire to AMEND THE TERM of the Lease;
NOW THEREFORE: For good and valuable consideration, the sufficiency and receipt
of which are hereby acknowledged, the undersigned, by their signatures below,
agree that THE LEASE IS HEREBY AMENDED AS FOLLOWS:
The TERM of the Lease is changed to FOUR YEARS AND TWO MONTHS.
The EXPIRATION DATE is changed to FEBRUARY 28, 2000.
Tenant is granted an OPTION TO RENEW for FIVE YEARS AT MARKET
RENTAL, with an ADDITIONAL OPTION TO RENEW AT MARKET RENTAL
FOR ONE PERIOD OF FIVE YEARS.
LANDLORD: TENANT:
XXXX XXXXXX XXXXXXXXXXX AMSCAN INC.
_____________________________ /s/XXXX X. XXXXXX
XXXX X. XXXXXX, ITS VICE PRESIDENT
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