EXHIBIT 10.12
AGREEMENT
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THIS AGREEMENT of lease, executed this eleventh of April, 1997 between
xXXxX*s Inc., having its offices at 000 Xxxxxx Xx., 0xx xxxxx, Xxx Xxxx, XX
00000, hereinafter referred to as Lessee, and Keystone Distribution Center, Inc.
having its offices at 000 Xxxxxxxx Xxxxxx, Xxxxxxx, XX 00000, hereinafter
referred to as Lessor.
WITNESSETH:
1. LESSOR, for and in consideration of the rent, covenants and agreements
hereinafter more fully mentioned and reserved, does by these presents
lease to the Lessee premises defined as Building #7 and #6 in Exhibit
A (the "premises").
a. TERM -
The term of the lease shall commence on June 1, 1997 and expire
on June 30, 2000. Possession shall commence June 1, 1997 and
rental shall commence July 1, 1997.
b. BASE RENTAL -
The total base rental of this lease is $1,054,8000. The rental is
payable in monthly installments as follows in advance on the
first day of each month:
$ / S.F. $ / Month $ / Year
-------- --------- --------
Year 1 $ 3.00 $ 29,300 $ 351,600
Year 2 $ 3.00 $ 29,300 $ 351,600
Year 3 $ 3.00 $ 29,300 $ 351,600
The first month's rent is due at the signing of this lease
document.
c. RENEWAL OPTION -
Lessee shall have (2) 3 year renewal options. Each renewal option
must be exercised by notification in writing no less than 180
days prior to the expiration of the current term. The rent is
payable in monthly installments as follows in advance on the
first day of each month:
OPTION 1
$ / S.F. $ / Month $ / Year
--------- --------- --------
Year 1 $ 3.15 $ 30,765 $ 369,180
Year 2 $ 3.15 $ 30,765 $ 369,180
Year 3 $ 3.25 $ 31,742 $ 380,900
OPTION 2
$ / S.F. $ / Month $ / Year
--------- --------- --------
Year 1 $ 3.25 $ 31,742 $ 380,900
Year 2 $ 3.45 $ 33,695 $ 404,340
Year 3 $ 3.45 $ 33,695 $ 404,340
2. PAYMENT OF RENT AND DEFAULT - If the monthly said rent or part thereof
or any payment due as defined in this lease shall remain in arrears
and unpaid for a period of ten (10) days following written notice from
Lessor, or if Lessee shall fail to comply with any terms, covenants,
conditions, or agreements of this lease, or / and shall have failed to
cure such defaults within twenty (20) days of Lessor's written notice,
then in any of the said events, Lessor may at its option declare this
lease and the tenancy hereby created, terminated or maintain Lessee's
tenancy under the lease and pursue any remedy at law or equity now or
hereafter available to the Lessor. In the event Lessee is dispossessed
from the premises as a result of actions taken pursuant to this
paragraph, Lessor shall use its best efforts relet the premises and
Lessee's obligations under this paragraph shall be reduced in the
amount of any proceeds of such reletting.
3. USE - It is understood and agreed that Lessee shall use the demised
premises for a pick, pack, and ship operation and storage facility.
Notwithstanding the foregoing, Tenant shall be permitted to use the
demised premises for any legally permitted purpose which does not (i)
cause traffic and parking congestion in the property owned by Lessor
("Lessor's Property") that is adjacent to the demised premises, (ii)
overload the capacity of the demise premises or Lessor's Property, or
(iii) negatively impact the marketability of Lessor's Property,
provided, however, that such use shall not include volatile or
unstable substances creating fire or explosion hazards, unless such
hazardous use is first approved, in writing, by the Lessor, and the
Lessor shall have the unilateral right to reasonable reject such
hazardous use.
It shall be the Lessor's responsibility to see that the building is in
compliance with the local building codes and Pennsylvania Department
of Labor and Industry regulations for use as a warehouse and ancillary
offices only at the inception of this lease. Lessee shall be
responsible, at Lessee's expense, for securing a codes enforcement
inspection and use certificate, if applicable, for Lessee's specific
use. Lessee shall be responsible, at Lessee's expense for bringing the
demised premises into compliance with code requirements for Lessee's
specific use, and for keeping the premises in compliance as its use
may require.
4. PARKING - Lessee shall have the use of 100 automobile parking spaces
on the premises as indicated in Exhibit A.
In the event that Lessee expands its leasehold in the property,
additional automobile parking spaces will be provided in a ratio of 1
space per 1,000 square feet of additional rented space, or as mutually
agreed.
5. MAINTENANCE - Lessee, at its expense, shall maintain and keep the
leased premises, including without limitation, windows, doors, lights,
truck loading docks, and interior walls in good repair. Lessee shall
be responsible for its own security for the leased premises.
The foregoing shall not be deemed to require Lessee to pay for repairs
required as a result of the events for which Lessor is insured under
the policy of insurance referred to in paragraph 7.
Lessor shall maintain in good condition the building roof and exterior
walls and other major structural components.
Lessee shall vacate and surrender the premises upon termination of
this lease or upon any renewal thereof, in the same condition as said
premises were at the beginning of this lease, reasonable wear and tear
excepted.
6. REAL ESTATE TAXES - Lessee shall pay as additional monthly rent its
pro rata share of the real estate taxes levied against the property of
which the demised premises are a part.
For the purpose of this lease, the net rentable area of the property
of which the demised premises are a part is defined as 406,000 square
feet.
Pro rata share is defined as the proportion that the net rentable area
of leased premises bears to the total net rentable area of the
property. For the purposes of this agreement that proportion is
defined as 28.8%
For the initial one year term of the lease, beginning June 1, 1997 the
additional monthly rent is $3,132. This additional rental will be
adjusted annually to reflect the fluctuation in costs incurred by the
Lessor.
Thirty days prior to the anniversary date of beginning of the lease
agreement, the Lessor will send the Lessee notification of the
additional monthly rent due for the subsequent year, along with
supporting documents therefore.
7. INSURANCE - Lessee shall pay as additional monthly rent its pro rata
share of the cost of insuring the property of which the demised
premises are a part against loss by fire and such other hazards as are
provided for by special all risk endorsement to a standard
Pennsylvania insurance policy.
Pro rata share is defined as the proportion that the net rentable area
of the premises bears to the total net rentable area of the property.
For the purposes of this agreement that proportion is defined as
28.8%.
For the initial one year term of the lease, beginning June 1, 1997,
the additional monthly rent is $1,090. This additional rental will be
adjusted annually to reflect the fluctuations in costs incurred by the
Lessor.
Thirty days prior to the anniversary date of beginning of the lease
agreement, the lessor will send the Lessee notification of the
additional monthly rent due for the subsequent year, along with
supporting documents therefor. The rental adjustment will not exceed
12% in any one year. Lessee shall not do or store anything on the
premises which will increase the insurance rates for the building or
contents, nor will the Lessee do or allow to be done on the premises
anything that is on violation of National Fire Protection Association
codes. In the event the cost of insurance shall be increased by reason
of Lessee's use or the materials kept or stored thereon, Lessee agrees
to pay the additional cost of such insurance within fifteen (15) days
of receipt of an invoice and supporting documents therefor.
Lessee shall be responsible for insuring its contents stored in the
premises against such hazards as it may decide.
Lessee shall maintain liability insurance with a combined single limit
of $5,000,000.
8. COMMON AREAS - Lessee shall pay as additional monthly rent its pro
rata share of the common area costs such as utilities, grounds and
paved area maintenance, fire protection service, and regular sprinkler
maintenance.
The pro rata share of common charges is defined as the proportion that
the net rentable area of leased premise bears to the total net
rentable area of the property. For the purpose of this agreement that
proportion is defined as 28.8%.
For the initial one year term of the lease, beginning June 1, 1997,
the additional monthly rent is $780. This additional rental will be
adjusted annually to reflect the fluctuations in casts incurred by the
Lessor.
Thirty days prior to the anniversary date of the beginning of the
lease agreement, the Lessor will send the Lessee notification of the
additional monthly rent due for the subsequent year, along with
supporting documents therefor. The rental adjustment will not exceed
12% in any one year.
9. UTILITIES - Lessee shall be responsible for all utility expenses for
the premises. Utilities shall include: fuel for heating or processing;
electricity, water for
sanitary, processing, or sprinkler operation; sewerage; and refuse
removal. An account for refuse removal will be established by the
Lessee. Other utilities will be accounts obtained and maintained in
the name of Lessor and will be separately metered for usage. The
meters measuring utilities in the demised premises shall not measure
usage of any portion of the property other than the demised premises.
However, in the event that joint metering is necessary, the resulting
utility charge will be determined by prior agreement between Lessor
and Lessee. Lessor will xxxx Lessee within ten days and failure to pay
utility bills within ten days is an event of default.
10. REFUSE REMOVAL - Lessee shall be responsible, at Lessee's expense, for
the removal of all refuse, waste, and debris form the demised
premises.
11. INDEMNIFICATION - Lessor agrees to indemnify and hold Lessee harmless
from and against any and all liability, claims, damages, costs,
expenses, penalties, and judgments (including, without limitation,
attorneys' fees) arising out of any injury to person, loss of life or
damage to property that shall occur upon the premises or Lessor's
other property, except for those resulting from the wrongful act or
negligence of Lessee or its employees, agents, contractors,
representatives, or visitors.
12. DESTRUCTION - In the event of a partial destruction of the premises
during the term, which requires repairs to the premises, or the
premises being declared unsafe or unfit for occupancy by on authorized
public authority for any reason other than Lessee's act, use, or
occupation, which declaration requires repairs to the premises, Lessor
shall forthwith make such repairs provided such repairs can be made
within thirty (30) days under the laws and regulations of authorized
public authorities, but such partial destruction, including any
destruction necessary in order to make repairs required by any such
declaration, shall in no way annul or void this lease except that
Lessee shall be entitled to proportionate reduction in rent while such
repairs are being made, provided however that if premises shall be
more than 40% unsafe or unfit for occupancy or partially destroyed the
Lessee at its sole option shall be permitted to terminate the lease
and no further rent will be due hereunder.
The total destruction, including any destruction required by any
public authority, of the premises shall terminate this lease
automatically.
13. SUBLEASE - Lessee will not assign this lease nor underlet nor in any
manner dispose of the premises or any part thereof, without the
written consent of the Lessor, which consent will not be unreasonably
withheld. Notwithstanding the foregoing, Lessee shall have the right
to sublet up to fifty percent (50%) of the demised premises without
Lessor's consent provided that no subtenant shall be permitted to use
the subleased space in a manner inconsistent with Article 3 hereof.
14. BANKRUPTCY - If Lessee shall be declared a bankrupt or shall make an
assignment for the benefit of creditors, the whole of the rent for the
then entire term shall immediately become due and payable.
15. LESSEE ALTERATIONS - Lessee will not, without the prior written
consent of the Lessor, make any alteration, addition, or change in or
to the premises, nor in any way deface or mutilate the walls, floors,
ceiling, or other parts thereof, nor do or keep anything on the
premises which will affect the insurance against fire or other hazards
or the rate thereof, or which shall violate any law or government
regulation.
16. LESSOR INSPECTION - Lessor shall have the right to enter the premises
during the normal business hours of the Lessee upon reasonable notice
for the purpose of inspecting the premises and for the purpose of
making repairs required therein. Lessor shall have the right in the
event of an emergency to enter the premises at any time, by master key
or by force, if necessary, for purposes of preventing damage, making
emergency repairs, and enforcing any provisions of this lease.
17. CONDEMNATION - If, during the term of this lease, the whole or any
part of the demised premises shall be taken under the power of Eminent
Domain by any public, quasi-public, or private authority, then in such
event, the proceeds of said condemnation shall be paid to Lessor.
A. In the event the taking of the demised premises shall result
in a reduction in the size of the building and / or parking areas such
that the remaining areas are not reasonably suited for the conduct of
Lessee's business, then Lessee may terminate this Lease, at Lessee's
election, by giving Lessor forty five (45) days notice of its election
to terminate.
B. In the event the taking of the demised premises shall result
in a reduction in the size of the building and Lessor shall determine
that the cost of restoration of the building is not reasonable and
within the damages awarded by the condemning authority, then in such
event, Lessor may elect to terminate this lease by giving Lessee
forty-five (45) days notice of its election to terminate.
C. In the event the taking of the demised premises shall result
in a reduction in the size of the building, and such reduction does
not unreasonably affect Lessee's business operation, then in such an
event this Lease shall continue in full force and effect except that
the rental shall be reduced proportionately based on the reduction of
the demised area.
D. At such time as a notice of intent to condemn is received by
Lessor, Lessor will immediately notify Lessee of said action.
E. Lessee shall have the right to maintain an independent action
against the condemning authority for condemnation awards, provided
that such action shall not serve to reduce any award available to
Lessor.
18. NON-WAIVER - The failure of Lessor to insist in any one or more
instances upon a strict performance of any covenant of this lease, or
to exercise any right herein contained, shall not be construed as a
waiver for the future of such covenant or right, but the same shall
continue in full force and effect, unless the contrary is expressed in
writing by Lessor to Lessee.
It is the intention of the parties hereto to be legally bound hereby
and this lease shall be binding upon the said parties hereto, their
respective heirs, executors, administrators, successors, and / or
assigns.
19. COVENANT OF QUIET ENJOYMENT - Lessor agrees that so long as Lessee
shall and may peaceably and quietly have, hold and enjoy the premises
for the term hereby granted without disturbance or hindrance by or
from Lessor or anyone claiming under Lessor.
20. NOTICES - Notices given hereunder shall be in writing and shall be
given by certified mail, return receipt requested, or by courier
service providing written proof of delivery , as follows:
If to Lessee:
Delia's Inc.
000 Xxxxxx Xx. 0xx Xx.
Xxx Xxxx, XX 00000
ATTN: Xxxxxxx Xxxx
If to Lessor:
Keystone Distribution Center, Inc.
000 Xxxxxxxx Xx. Xxxxxxx, XX 00000
ATTN: Xxxxxxxx Xxxxxx
Notice given by certified mail shall be effective upon the date of
receipt, refusal or nondelivery indicated in the return receipt; by
courier, upon the date of delivery as set forth in the courier's
delivery receipt. Any party may from time to time, by notice to the
other parties, specify another address for notice purposes.
21. RIGHT OF REFUSAL - A. If at any time, or from time to time, during the
term of the lease, any portion of the property of which the demised
premises is a part
("Additional Space") shall become available for leasing, and Lessor
shall be prepared to offer such space in the open market, then Lessor
shall notify Lessee in writing (the "Offer Notice") of such
availability and shall state in such notice the date in which Lessor
expects to be able to deliver the Additional Space. If Lessee desires
to lease the Additional Space, Lessee shall have the right,
exercisable by delivery of notice ("Lessee's Exercise Notice") to
Lessor within sixty (60) days after receipt by Lessee of Lessor's
notice of availability, to lease the Additional Space for the
remaining term of this lease.
B. The date on which possession of the Additional Space is delivered
to Lessee pursuant to this Article 21 is the "Additional Space
Commencement Date." On the Additional Space Commencement Date the
Additional Space shall be added to and deemed a part of the demised
premises for the remaining term of this lease, subject to the terms
and conditions of this lease except that (i) the Base Rental reserved
hereunder shall be increased by an amount equal to the product of (x)
the number of usable square feet in the Additional Space and (y) the
Base Rental per square foot that is then applicable to the demised
premises and (ii) Lessee's pro rata share with respect to real estate
taxes, insurance and common areas shall be increased by the fraction,
expressed as a percentage, the numerator of which is the number of
usable square feet contained in the Additional Space and the
denominator of which is the number of square feet contained in the
property of which the demised premises is a part.
22. ENTIRE AGREEMENT - This Agreement, including the Exhibits hereto,
contains the entire agreement among the parties. There are no other
terms, obligations, covenants, representations, statements or
conditions, oral or otherwise of any kind whatsoever concerning these
transactions. This Agreement shall not be altered, amended, changed or
modified except in a writing executed by Lessor and Lessee.
This agreement shall be governed by the laws of the state of
Pennsylvania.
IN WITNESS WHEREOF, the parties have hereunto set their hands and
seals the day and year first above written.
Keystone Distribution
Center, Inc.
/s/ Xxxxxxx Xxxxxxx BY /s/ Xxxxxxxx X. Xxxxxx
ATTEST LESSOR
Delia's Inc.
/s/ Xxxx Xxxxxxxxx BY /s/ Xxxxxxx Xxxx
ATTEST LESSOR