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EXHIBIT 10.4
WAREHOUSE LEASE
Agreement of Warehouse Lease made the 23rd day of May, 1995, between XXXXXX
COMPANY, a Delaware corporation, having its principal office at 0000
Xxxxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 (hereinafter referred to as
"Lessor") and AMERICAN ITALIAN PASTA COMPANY, (hereinafter referred to as
"Lessee".)
WITNESSETH
Lessee is the fee owner of the land described in EXHIBIT A attached
hereto and by this reference made a part hereof (the "Land"). Lessor and Lessee
do hereby enter into this Lease on the understanding and agreement that Lessee
shall transfer the Land to Lessor subsequent to the execution of this Lease.
The Lessor shall, and does hereby, demise and lease to the Lessee a building
(the "Building"), consisting of 80,834 square feet of warehouse space, together
with the Land on which the Building is located, together with all rights,
alleys, rights of way, easements and appurtenances belonging or appertaining to
the Building or the Land (the Building, Land, and all other improvements,
rights, easements and appurtenances relating thereto being hereinafter referred
to collectively as the "Premises"), upon the following terms, covenants and
conditions. The Building shall be constructed by Xxxxxx, at Xxxxxx'x sole cost
and expense, in accordance with the Plans and Specifications dated March 3,
1995, prepared by ASI Incorporated for the "New Distribution Center for the
Xxxxxx Company in Columbia, South Carolina," (the "Plans and Specifications").
The Building, when fully racked, shall have a net storage capacity of
approximately 10,000 pallet positions and a gross storage capacity of
approximately 13,300 pallet positions based on a seven-high stacking
configuration in a double-deep racking system.
1. TERM - The initial term of this Lease ("Initial Term") shall be for 15 years
commencing on the date of actual occupancy of the Premises by the Lessee, or on
the date which is thirty (30) days following the date of substantial completion
of the Building, whichever is first to occur (hereinafter referred to as the
"Commencement Date"). Lessor will use its best efforts to have the Building
substantially completed by June 19, 1995. Construction of the Premises shall not
be considered substantially complete until (i) it is substantially completed in
every respect in accordance with the Plans and Specifications, (ii) a
certificate of occupancy for the Building has been issued and delivered to
Lessee, and (iii) the Building is in such condition to allow proper storage of
Lessee's product therein.
2. RIGHT OF EXTENSION - Lessee is hereby granted three (3) separate options to
extend the term of this Lease, each option period to be for five (5) years.
Except as to Fixed Rental (hereinafter defined), and as otherwise provided
herein, Lessee's occupancy of the Premises during such period(s) shall be on and
subject to the same terms and conditions as the Initial Term hereof. This Lease
shall automatically renew for each of said extension periods unless Lessee
gives written notice to Lessor of its intention not to extend this Lease at
least six (6) months prior to the end of the then current term.
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3. RENT -
(a) Lessee hereby covenants and agrees to pay to Lessor at its office
or such other place as Lessor may from time to time designate, as rent for the
Premises during the term of this Lease, a rental as set forth below, payable
monthly in advance on the first day of each and every month, commencing on the
Commencement Date. If the Commencement Date hereunder is other than the first of
a month, rental for the partial month shall be prorated on a daily basis.
(b) INITIAL TERM. Rent for the Initial Term shall consist of:
1. FIXED RENTAL = $548,000.000 per year* for the Initial Term,
Payable $45,666.66 per month
*This rental amount assumes that the Building has been fully
racked to accommodate a gross storage capacity of 13,300 pallet
positions, but that Lessee does not need all of said pallet
positions for storage of its pasta and other food products
(sometimes referred to herein as Lessee's "product"). At such
time as Lessor and Lessee agree in writing that the gross pallet
positions needed by Lessee for the storage of Lessee's product
exceeds 10,000, Fixed Rental shall be increased to, and Lessee
shall pay Fixed Rental in the amount of $553,000 per year for
the Initial Term, which amount shall be payable in monthly
installments of $46,083.33. In the event that Lessor and Lessee
shall enter into a materials handling, operating and service
agreement pursuant to which Lessor operates the Premises and
provides services related to the storing, packing, loading, and
shipping of Lessee's product (sometimes referred to herein as
the "Materials Handling Service Agreement"), then Lessor shall
give Lessee written notice at such time that more than 10,000
gross pallet positions are needed for the storage of Lessee's
product.
2. VARIABLE RENTAL: Subject to SECTION 11 herein, Variable Rental
shall be equal to the sum of real estate taxes and assessments levied,
assessed or imposed upon the Premises from and after the Commencement
Date, and insurance and maintenance expenses incurred by Lessor for the
Premises from and after the Commencement Date and during the term of
this Lease (referred to collectively as the "Variable Rental Elements").
Utilities are to be paid directly by Lessee as hereinafter provided.
Maintenance expenses shall consist of all expenses necessary to maintain
all portions of the Premises in good repair, including the racks, the
heating and cooling system, docks and accessories, security system, fire
prevention equipment, routine housekeeping, rodent control, upkeep,
maintenance and repair of grounds, driveways, and parking areas and any
expenses necessary to maintain the compatibility of the Premises with
the storage of food products. Notwithstanding the foregoing, in no event
shall the Variable Rental Elements
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include, or Lessee be liable for or be required to pay, any of the
following: (i) repairs that are attributable to any latent defects
(latent defects as used herein shall mean a defect which is
a departure from the Plans and Specifications not apparent upon an
ordinary and reasonable inspection by a professional engineer
qualified to make such inspection); (ii) costs attributable to any
construction defects or to correct any work not in compliance with the
Plans and Specifications; (iii) costs covered by any warranty or
guaranty; (iv) costs related to casualties or liabilities which are
reimbursed by insurance; (v) costs attributable to Lessor's
negligence; (vi) debt service; (vii) the costs of capital improvements
to the Premises, unless Lessee has approved such costs in advance in
writing; or (viii) maintenance and repair costs in excess of $2,500,
unless Lessee has approved such costs in advance in writing.
Subject to SECTION 6 hereof, Lessor shall pay all real estate taxes
and insurance premiums for the Premises and forward copies of said
bills and evidence of payment thereof to Lessee. Lessee shall
reimburse Lessor for the amounts shown as paid on said bills within 15
days of Lessee's receipt of said bills. Lessor will provide an
itemized xxxx of its maintenance expenses for the Premises to Lessee
on a monthly basis. Lessee shall reimburse Lessor for said
maintenance expenses with 15 days of Lessee's receipt of said
statements.
(c) EXTENSION TERM. Rent for any extension term of this Lease shall
consist of (i) Fixed Rental in an amount to be negotiated in good faith by
Lessor and Lessee with the understanding and agreement that the Fixed Rental for
any extension term shall be significantly lower than the Fixed Rental for the
Initial Term; and (ii) Variable Rental as set forth in (b) above.
4. OPTION TO PURCHASE THE LEASED PREMISES -
(a) EXERCISE OF OPTION. Lessee shall have the right and option to
purchase the Premises at any time during the Initial Term or any extension term
of this Lease only upon the terms and conditions stated below. Lessee shall
exercise its aforesaid option by giving Lessor written notice of Lessee's
election to exercise its option and specifying the date, time and place of
closing, which date (the "Closing Date") shall be neither earlier than thirty
(30) days nor later than sixty (60) days after the notice is given.
(b) QUALITY OF TITLE. If said notice of election to purchase be given
as aforesaid, Lessor shall and covenants and agrees to sell and convey title to
the Premises to Lessee (said title to be subject to the same exceptions,
easements and other matters to which title was subject at the time title was
conveyed by Lessee to Lessor, except as hereinafter provided) on the Closing
Date free and clear of all liens and encumbrances whatsoever except (i) those
described on EXHIBIT B attached hereto, (ii) those to which the Leased Premises
became subject with Lessee's written consent, or which resulted from any failure
of Lessee to perform any of its agreements or obligations under this Lease, and
(iii) taxes and assessments, general and special, for the then
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current year, if any (the "Permitted Encumbrances"). Lessee's rights under this
SECTION 4 shall be prior to the lien of any mortgage (and collateral mortgage
documents) on the Premises, so long as, in connection with closing, Lessee
agrees that all or a designated portion of the Purchase Price be paid to such
mortgagee, as specified in writing by Lessor and such mortagee.
(c) OPTION TERMS AND PURCHASE PRICE. Lessee shall have the right to
purchase the Premises only upon the conditions set forth in this Section 4 and
for the price and sums (the "Purchase Price") as follows:
1. If (i) the stock ownership of Lessor by the Xxxxxx Family,
as hereafter defined, falls below 50% of the total voting power of all
stock entitled to vote; (ii) Lessor sells, transfers or conveys the
Premises to a person or entity other than Lessee, a member of the Xxxxxx
Family or an entity controlled by the Xxxxxx Family; or (iii) Lessor is
unable or refuses to finance or construct an expansion of the Premises, as
requested by Lessee pursuant to SECTION 32 hereof (unless Lessor's refusal
is based upon (x) a material adverse change in the financial condition of
Lessee or (y) the failure of Lessor and Lessee to reach agreement, upon
good faith negotiations, as to the terms and conditions of the expansion),
then at Lessee's option, Lessee may purchase the Premises from the first
anniversary date of the Commencement Date of this Lease for the price set
forth below based upon the Closing Date of the purchase of the Premises:
(i) From the first anniversary date of the Commencement
Date of this Lease but before the second anniversary date of the
Commencement Date of this Lease the purchase price shall be
$3,855,000.00
(ii) From the second anniversary date but before the third
anniversary date $3,748,000.00
(iii) From the third anniversary date but before the fourth
anniversary date $3,629,000.00
(iv) From the fourth anniversary date but before the fifth
anniversary date $3,495,000.00
(v) From the fifth anniversary date but before the sixth
anniversary date $3,347,000.00
(vi) From the sixth anniversary date but before the seventh
anniversary date $3,181,000.00
(vii) From the seventh anniversary date but before the eighth
anniversary date $2,997,000.00
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(viii) From the eighth anniversary date but before the ninth
anniversary date $2,790,000.00.
(ix) From the ninth anniversary date but before the tenth
anniversary date $2,560,000.00.
(x) From the tenth anniversary date but before the eleventh
anniversary date $2,304,000.00.
(xi) From the eleventh anniversary date but before the twelfth
anniversary date $2,017,000.00.
(xii) From the twelfth anniversary date but before the
thirteenth anniversary date $1,698,000.00.
(xiii) From the thirteenth anniversary date but before the
fourteenth anniversary date $1,341,000.00.
(xiv) From the fourteenth anniversary date but before the
fifteenth date $943,000.00.
(xv) From the fifteenth anniversary date of the Commencement
Date of this Lease, if Lessee has exercised its option to extend the term
of this Lease as provided in SECTION 2 hereof, but before the Lease has
terminated, the purchase price shall be $800,000.00.
The Xxxxxx Family is defined to be Xxxxx Xxxxxx, Xxxxx Xxxxxx, Xxxx Xxxxxx,
Xxxxx Xxxxxx (collectively the "Lanters") and any spouse or child of the
Lanters, and any trust whose primary beneficiary is any of the aforementioned
persons, and the estate of any of the aforementioned persons during its
administration.
2. In addition, Lessee may purchase the Premises at any time from
and after the fifth anniversary date of the Commencement Date of this Lease for
the price determined below based upon the Closing Date of the purchase of the
Premises.
(i) From the fifth anniversary date of the Commencement Date
of this Lease but before the sixth anniversary date of the Commencement
Date of this Lease the purchase price shall be $3,847,000.00.
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(ii) From the sixth anniversary date of the Commencement
Date of this Lease but before the seventh anniversary date of the
Commencement Date of this Lease the purchase price shall be
$3,681,000.00.
(iii) From the seventh anniversary date of the
Commencement Date of this Lease but before the eighth anniversary date
of the Commencement Date of this Lease the purchase price shall be
$3,497,000.00.
(iv) From the eighth anniversary date of the Commencement
Date of this Lease but before the ninth anniversary date of the
Commencement Date of this Lease the purchase price shall be
$3,290,000.00.
(v) From the ninth anniversary date of the Commencement
Date of this Lease but before the tenth anniversary date of the
Commencement Date of this Lease the purchase price shall be
$3,060,000.00.
(vi) From the tenth anniversary date of the Commencement
Date of this Lease but before the eleventh anniversary date of the
Commencement Date of this Lease the purchase price shall be
$2,804,000.00.
(vii) From the eleventh anniversary date of the
Commencement Date of this Lease but before the the twelfth anniversary
date of the Commencement Date of this Lease the purchase price shall
be $2,517,000.00.
(viii) From the twelfth anniversary date of the
Commencement Date of this Lease but before the thirteenth
anniversary date of the Commencement Date of this Lease the purchase
price shall be $2,198,000.00.
(ix) From the thirteenth anniversary date of the
Commencement Date of this Lease but before the fourteenth anniversary
date of the Commencement Date of this Lease the purchase price shall
be $1,841,000.00.
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(x) From the fourteenth anniversary date of the
Commencement Date of this Lease but before the fifteenth anniversary
date of the Commencement Date of this Lease the purchase price shall
be $1,443,000.00.
(xi) From the fifteenth anniversary date of the
Commencement Date of this Lease if Lessee has exercised its option to
extend the term of this Lease as provided in SECTION 2 hereof but
before the Lease has terminated, the purchase price shall be
$1,000,000.00.
Lessee shall also pay any sums that are, pursuant to any provisions of this
Lease, due and owing from Lessee to Lessor on the Closing Date. The Purchase
Price shall be paid in cash or certified check on the Closing Date unless
otherwise agreed to by the parties.
Nothing in this SECTION 4 shall release or discharge Lessee from its duty
or obligation under this Lease to make any payment of any rent or other sums
which, in accordance with the terms of this Lease, become due and payable prior
to the Closing Date or its duty and obligation to fully perform and observe all
covenants and conditions herein stated to be performed and observed by Lessee
prior to the Closing Date.
(d) TITLE POLICY. Lessor shall deliver to Lessee, at Lessor's
expense, at or prior to the Closing Date, a title policy in the amount of the
total Purchase Price. The policy shall be issued by a nationally recognized
title insurance company. The title policy shall insure merchantable fee simple
title in Lessee, subject only to the Permitted Encumbrances and shall include
such reasonable endorsements as may be requested by Tenant.
(e) At or before the Closing Date, Lessor shall deliver to Lessee the
following:
(i) an affidavit in form and substance acceptable to Lessee that
Lessor is not a "foreign person" within the meaning of Section
1445(e)(3) of the Internal Revenue Code of 1986, as amended;
(ii) a closing statement in form and content acceptable to Lessor
and Lessee;
(iii) a warranty deed, properly executed and conveying the
Premises to Lessee free and clear of all liens and encumbrances
whatsoever except for the Permitted Encumbrances;
(iv) a Xxxx of Sale duly executed by Lessor conveying to Lessee
title to any personal property, if any, to be conveyed with the
Premises, which personal property shall be free and clear of any liens
and encumbrances with full warranties of title; and
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(v) any other documents and instruments, or agreements
as may be required in futherance of the purchase of the
Premises.
(f) On the Closing Date and upon delivery of the above
documents and instruments and satisfaction of any and all other conditions
herein set forth, Lessee shall pay the full purchase price for the Premises to
Lessor, whereupon, this Lease shall, ipso facto, terminate.
(g) Except as otherwise provided herein, closing costs shall
be apportioned between Lessor and Lessee as is customary where the Premises are
located.
(h) In addition, Lessor shall pay the sales, transfer and
documentary taxes and conveyance fees, if any, that might become due because of
the transfer of the Premises.
(i) If for any reason whatsoever the purchase of the Premises
by Lessee pursuant to valid notice of election to purchase given as aforesaid
is not effected on the Closing Date, this Lease shall be and remain in full
force and effect according to its terms the same as though no notice of
election to purchase had been given.
(j) The right of Lessee to exercise an option to purchase the
Premises under the provisions of this Section shall, at Lessee's option, remain
unimpaired notwithstanding any condemnation of title to, or the damage or
destruction by fire or other casualty of, all or any part of the Leased
Premises, and the provisions of SECTIONS 15 and 16 shall be construed in the
light of the effect of said option exercised by Lessee. If Lessee shall
exercise its said option and pay the full Purchase Price, then the condemnation
awards or insurance proceeds received by Lessor, whether received prior to or
after closing, shall belong and be paid to Lessee notwithstanding any other
provision in SECTIONS 15 or 16. Notwithstanding the foregoing, if after
exercise of this option but prior to the Closing Date any of the Premises are
destroyed or substantially damaged by fire or any other cause, or the Premises
or part thereof is taken by eminent domain (or is the subject of a pending or
contemplated taking which has not been consummated). Lessee shall also have
the right to cancel this option by written notice. If this option is
canceled, this Lease shall be and remain in full force and effect according to
its terms the same as though no election to purchase had been exercised.
5. FIRST MONTH'S RENT AND DEPOSIT - Lessee shall deposit upon execution of
this Lease $45,666.66 with Lessor as security for the payment of rent and the
compliance by Lessee with other terms of this Lease. This deposit shall be
applied to the first month's Fixed Rental under this Lease.
6. TAXES - Promptly upon receipt and prior to payment thereof, Lessor
shall provide a copy to Lessee of all bills for real estate taxes and
assessments levied, assessed or imposed upon the Premises during the term of
this Lease. Lessor agrees that Lessee shall have the right, in Lessee's or
Lessor's name, but at Lessee's sole cost and expense, to contest the amount or
validity of any tax or assessment by appropriate proceedings, timely
instituted, provided that (a) Lessee gives
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Lessor written notice of Lessee's intention to do so at least twenty (20) days
prior to the delinquency thereof and (b) Lessee diligently prosecutes any such
contest, at all times effectively stays or prevents any official or judicial
sale of the Premises, under execution or otherwise, pays any final judgment
enforcing any tax or assessment so contested, and promptly procures and records
satisfaction thereof. Lessor shall pay all real estate taxes and assessments
unless Lessee gives written notice to Lessor as set forth above and notifies
Lessor that payment thereof, or payment thereof under protest, would operate as
a bar to such contest or interfere materially with the prosecution thereof, in
which event Lessor shall, upon request by Lessee, postpone or defer payment of
such tax or assessment if (i) neither the Premises nor any portion thereof
would, by reason of such postponement or deferment, be in danger of being
forfeited or lost, and (ii) Lessee shall have deposited with Lessor cash, a
certificate of deposit payable to Lessor, bond or other security reasonably
acceptable to Lessor in the amount of the tax or assessment so contested and
unpaid. Lessor shall, if requested by Lessee, cooperate with Lessee in any such
proceedings; provided, however, that Lessor shall not be liable for any expenses
whatsoever in connection therewith.
7. SHORT FORM LEASE - This Lease shall not be recorded, but the parties
agree to execute a Short Form Lease setting forth the above option to purchase,
substantially in the form attached hereto as EXHIBIT C.
8. UTILITIES - Lessee agrees to promptly pay all electric, gas, water and
sewer services and other utilities used or consumed on the Premises.
9. COMPATIBILITY OF PREMISES - Lessor understands that the Premises must be
compatible with the storage of food products, as specified on EXHIBIT D attached
hereto and by this reference made a part hereof, and the Premises will be so
maintained. The expenses for such maintenance shall be included in the Variable
Rental Elements.
10. INSURANCE
(a) Property
(i) Lessor shall throughout the life of this Lease, keep the
Premises and all parts thereof constantly insured in an amount equal to the full
replacement value thereof, except for land and such parts as, in the opinion of
Lessor and Lessee, are not properly subject to insurance, in such insurance
company or companies authorized to do business in the State of South Carolina as
may be approved by Lessee. The form of the policy or policies and the risks
covered thereby, shall be as from time to time reasonably directed by Lessee,
and if no form is prescribed by Lessee, such insurance policy shall be
"all-risk" extended coverage insurance. The term "full replacement value," as
used herein, shall mean the full actual replacement cost. Concurrently with the
execution of this Lease and thereafter not less than thirty (30) days prior to
the expiration date of the expiring policy(ies) Lessor shall deliver to Lessee a
copy or certificate of the policy provided for in this Section.
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(ii) Lessor shall also provide a standard form Warehouseman's
Legal Liability Insurance in the event that a Materials Handling Service
Agreement, is entered into by and between Lessor and Lessee.
(iii) Lessee shall provide insurance covering Lessee's
inventory and personal property for its full replacement value. Lessor shall
not provide insurance protection for Lessee's personal property and inventory,
except Warehouseman's Legal Liability Insurance under the condition stated in
subparagraph (ii) above.
(b) INDEMNIFICATION - LIABILITY INSURANCE
(i) Lessor shall not be liable to Lessee for any loss or
damage to Lessee or to any other person or to the property of Lessee or of any
other person except to the extent that such loss or damage shall be caused by
the intentionally tortious or negligent act of Lessor, its agents, servants or
employees. Subject to SECTION 10(C) of this Lease, Lessee shall and does
hereby agree to indemnify and save harmless Lessor, its successors or assigns,
from all claims and demands of every kind (unless arising out of or resulting
from the negligent or intentional act or omission of Lessor), that may be
brought against Lessor, its successors or assigns or any of them for or on
account of any damage, loss or injury to persons or property in or about the
Premises or the Building and its appurtenances, including damage to the
Premises, (i) arising from or out of Lessee's use or occupancy thereof, or (ii)
occasioned wholly or in part by any act or omission of Lessee, its agents,
servants, contractors, employees or invitees, and from any and all costs and
expenses, reasonable counsel fees and other charges which may be imposed upon
Lessor, its successors and assigns, or which Lessor, its successor or assigns
may incur in consequence thereof. Subject to SECTION 10(C) of this Lease,
Lessor shall and does agree to indemnify and save harmless Lessee, its
successors or assigns, from all claims and demands of every kind, that may be
brought against Lessee, its successors or assigns or any of them, for or on
account of any damage, loss or injury to persons or property in or about the
Premises arising out of the negligent or intentional act or omission of
Lessor, its agent, servants, contractors, employees or invitees, and from any
and all costs and expenses, reasonable counsel fees and other charges which may
be imposed upon Lessee, its successors and assigns, or which Lessee, its
successors or assigns may incur in consequences thereof. The provisions of
this SUBSECTION 10(B) shall survive the termination of this Lease.
(ii) Lessee covenants and agrees that Lessee will, throughout
the term of this Lease, carry and pay for comprehensive commercial general
liability with contractual liability insurance coverage with a company
reasonably satisfactory to Lessor, with a minimum limit of $3,000,000.00
combined single limit per occurrence, and will furnish Lessor with an original
signed counterpart of the certificate evidencing such coverage. All insurance
maintained by Lessee under this Lease shall name Lessor and/or Lessor's
designee as additional insureds, and shall also contain a provision stating
that such policy or policies shall not be canceled or materially altered except
after 30 days' prior written notice to Lessor, and if applicable, Lessor's
designee. If at any time Lessee does not comply with the covenants made in
this subsection, in addition to any
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other remedies to which Lessor may be entitled, Lessor may, at Lessor's option,
cause insurance as aforesaid to be issued, and Lessee agrees to pay the premium
for such insurance within 10 days of Lessor's written demand, together with 15%
of such premium for reimbursement to Lessor for Lessor's ancillary
administrative expenses related thereto.
(c) SUBROGATION - Each party (the "Releasing Party") hereby releases
the other party (the "Released Party") from any and all liability or
responsibility (to the Releasing Party by way of subrogation or otherwise) which
the Released Party would, but for this Section 10(c) have had to the Releasing
Party during the term of this Lease, resulting from the occurrence of any
accident or occurrence or casualty (i) which is or would be covered by a fire
and extended coverage policy (with vandalism and malicious mischief endorsement
attached) (irrespective of whether such coverage is being carried by the
Releasing Party), or (ii) covered by any other casualty or property damage
insurance being carried by the Releasing Party at the time of such occurrence,
even if such casualty resulted in whole or in part from any act or neglect of
the Released Party, its partners, officers, agents or employees; provided,
however, that the releases herein contained shall not apply to any loss or
damage occasioned by the intentionally tortious act of the Released Party. Each
Party hereto shall obtain a waiver from any insurance carrier with which it
carries insurance covering the Premises or the contents thereof, releasing its
subrogation rights against the other party.
11. REPAIRS, MAINTENANCE, SECURITY, HOUSEKEEPING, SANITATION - In the event
that a Materials Handling Service Agreement is entered into by and between
Lessor and Lessee, Lessor shall maintain all portions of the Premises in good
repair and shall be responsible for all repairs to racks, heating, docks and
accessories, including security system and fire prevention equipment. Lessor
will also be responsible for and shall conduct throughout the term hereof: (a)
routine housekeeping operations to keep the Premises free from dirt and debris
and (b) insect and rodent control including trapping not only in the storage
area but also the dock area and building perimeter. Should said Materials
Handling Service Agreement not be entered into as hereinabove provided, or if
entered into, be terminated prior to the expiration of the term of this Lease,
Lessee shall assume responsibility subject to SECTION 10(C) hereof, for all
maintenance, security, housekeeping, and sanitation referred to in this Lease
including this SECTION 11 and SECTIONs 3 and 9, herein, and maintenance costs
shall be removed as a Variable Rental Element from the calculation of Variable
Rental. In the event that Lessee assumes responsibility for the maintenance of
the Building, it shall not be responsible for the cost or repair of latent
defects (as defined in SECTION 3(B)), construction defects, costs attributable
to correct any work not in compliance with the Plans and Specifications, or
costs attributable to Lessor's negligence, and such repairs shall be made by
Lessor at its sole cost and expense. In addition, Lessee, for purposes of its
maintenance obligations hereunder, shall have the benefit of all warranties and
guarantees which Lessor may have upon construction of the Building, to the
extent said warranties and guarantees are assignable, and Lessor shall assign to
Lessee all of said warranties and guarantees, to the extent assignable.
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12. DEFAULT
A. EVENTS OF DEFAULT - The following events shall be deemed to be
events of default by Lessee under this Lease:
(1) Lessee shall fail to pay any installment of the rent herein
reserved when due, or any other payment or reimbursement to Lessor required
herein when due, and such failure shall continue for a period of ten (10)
days after written notice thereof to Lessee.
(2) Lessee shall become insolvent, or shall make a transfer in
fraud of creditors, or shall make an assignment for the benefit of
creditors.
(3) Lessee shall file a petition under any section or chapter of
the National Bankruptcy Code, as amended, or under any similar law or
statute of the United States or any State thereof; or an order for relief
shall be entered against Lessee in any proceedings filed against Lessee
thereunder.
(4) A receiver or trustee shall be appointed for all or
substantially all of the assets of Lessee.
(5) Lessee shall fail to discharge any lien placed upon the
Premises arising from a debt asserted against Lessee within twenty (20)
days after any such lien or encumbrance is filed against the Premises,
provided, however, the notwithstanding the foregoing, Lessee shall have
the right to contest any mechanics' or other similar lien if it notifies
Lessor in writing of its intention to do so, posts a bond with surety
sufficient to satisfy any and all mechanics' liens and similar liens and
all costs associated therewith, it diligently prosecutes such protest, and
at all times affectively stays or prevents any official or judicial sale of
the Premises, or any part thereof or interest therein, and pays or
otherwise satisfies any final judgment adjudging or enforcing such
contested lien claim and thereafter promptly procures record release or
satisfaction thereof.
(6) Lessee shall fail to comply with any term, provision or
covenant of this Lease other than the foregoing in this SECTION 12 and
shall not cure such failure within thirty (30) days after written notice
thereof to Lessee (or such longer period as required to cure the default,
if Lessee is diligently pursuing the cure of said default).
B. REMEDIES
(1) Upon the occurrence of any of such events of default described in
SECTION 12 hereof, Lessor shall have the option to pursue any one or
more of the following remedies without any notice or demand
whatsoever.
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(a) Terminate this Lease, in which event Lessee shall immediately
surrender the Premises to Lessor, and if Lessee fails so to do, Lessor
may, without prejudice to any other remedy which it may have for
possession or arrearage in rent, enter upon and take possession of the
Premises and expel or remove Lessee or any other person who may be
occupying the Premises or any part thereof, by force if necessary,
without being liable for prosecution or any claim of damages therefor.
(b) Enter upon and take possession of the Premises and expel or remove
Lessee and any other person who may be occupying such Premises or any
part thereof, without terminating this Lease and without being liable
for prosecution or any claim for damages therefor, and relet the
premises and receive the rent therefor.
(c) Enter upon the Premises, without terminating this Lease and without
being liable for prosecution or any claim for damages therefor, and do
whatever Lessee is obligated to do under the terms of this Lease; and
Lessee agrees to reimburse Lessor on demand for any expenses which
Lessor may incur in thus effecting compliance with Lessee's obligations
under this Lease, and Lessee further agrees that Lessor shall not be
liable for any damages resulting to the Lessee from such action, whether
caused by the negligence of Lessor or otherwise.
(d) Alter all locks and other security devices at the Premises without
terminating this Lease.
In the event Lessee fails to pay any installment of rent hereunder after
written notice to Lessee and within the cure period provided, to help defray
the additional cost to Lessor for processing such late payments Lessee shall
pay to Lessor on demand a late charge in an amount equal to five percent (5%)
of such installment; and the failure to pay such amount within ten (10) days
after demand therefor shall be an event of default hereunder. The provision for
such late charge shall be in addition to all of Lessor's other rights and
remedies hereunder or at law and shall not be construed as liquidated damages
or as limiting Lessor's remedies in any manner.
(2) Exercise by Lessor of any one or more remedies hereunder granted or
otherwise available shall not be deemed to be in acceptance of surrender of the
premises by Lessee, whether by agreement or by operation of law, it being
understood that such surrender can be effected only by the written agreement of
Lessor and Lessee. All claims for damages by reason of such re-entry and/or
repossession and/or alteration of locks or other security devices are hereby
waived, as are all claims for damages by reason of any distress warrant.
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forcible detainer proceedings, sequestration proceedings or other legal process.
Lessee agrees that any re-entry by Lessor may be pursuant to judgment obtained
in forcible detainer proceedings or other legal proceedings and Lessor shall not
be liable in trespass or otherwise.
(3) In the event Lessor elects to terminate the Lease by reason of an event
of default, then notwithstanding such termination, Lessee shall be liable for
and shall pay to Lessor, at the address specified for notice to Lessor herein:
(a) the sum of all rental and other indebtedness accrued to date of such
termination; (b) plus, as damages, an amount equal to the difference between (i)
the total rental hereunder for the remaining portion of the Lease term (had such
term not been terminated by Lessor prior to the date of expiration stated in
Section 1) and (ii) the then present value of the then fair rental values of the
Premises for such period.
(4) In the event that Lessor elects to repossess the premises without
terminating the Lease, then Lessee shall be liable for and shall pay to Lessor,
at the address specified for notice to Lessor herein, all rental and other
indebtedness accrued to the date of such repossession, plus rental required to
be paid by Lessee to Lessor during the remainder of the Lease term until the
date of expiration of the term as stated in SECTION 1 diminished by any net sums
thereafter received by Lessor through reletting the premises during said period
(after deducting expenses incurred by Lessor as provided in subsection (5)
below). In no event shall Lessee be entitled to any excess of any rental
obtained by reletting over and above the rental herein reserved. Actions to
collect amounts due by Lessee to Lessor under this subsection may be brought
from time to time, on one or more occasions, without the necessity of Lessor's
waiting until expiration of the Lease term.
(5) In case of any event of default by Lessee, or threatened or anticipatory
default, Lessee shall also be liable for and shall pay to Lessor, at the address
specified for notice to Lessor herein, in addition to any sum provided to be
paid above, reasonable brokers' fees incurred by Lessor in connection with
reletting the whole or any part of the Premises, the costs of removing and
storing Lessee's property, the costs of repairing, altering, remodeling or
otherwise putting the Premises into condition acceptable to a new tenant or
tenants, and all reasonable expenses incurred by Lessor in enforcing or
defending Lessor's rights and/or remedies including reasonable attorney's fees,
which shall not be less than fifteen percent (15%) of all sums then owing by
Lessee to Lessor whether suit is actually filed or not.
(6) In the event of Lease termination or repossession of the Premises for an
event of default by Lessee, Lessor shall not have any obligation to relet or to
attempt to relet the Premises, or any portion thereof, or to collect rental
after reletting; and in the event of reletting, Lessor may relet the whole or
any portion of the Premises for any period to any tenant and for any use and
purpose.
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(7) If Lessee should fail to make any payment or cure any default
hereunder within the time herein permitted, Lessor, without being under
any obligation to do so and without thereby waiving such default, may
make such payment and/or remedy such other default for the account of
Lessee (and enter the Premises for such purpose), and thereupon Lessee
shall pay Lessor, upon demand, all costs, expenses and disbursements
(including reasonable attorney's fees) reasonably incurred by Lessor in
taking such remedial action.
(8) In the event Lessor shall have taken possession of the Premises
pursuant to the authority herein granted then Lessor shall have the
right to keep in place and use all of the furniture, fixtures and
equipment at the Premises, including that which is owned by or leased to
Lessee at all times prior to any foreclosure thereon by Lessor or
repossession thereof by any lessor thereof or third party having a lien
thereon. Lessor shall also have the right to remove from the Premises
(without the necessity of obtaining a distress warrant, writ of
sequestration or other legal process) all or any portion of such
furniture, fixtures, equipment and other property located thereon and to
place same in storage at any premises within the County in which the
Premises is located; and in such event, Lessee shall be liable to Lessor
for costs incurred by Lessor in connection with such removal and
storage. Lessor shall also have the right to relinquish possession of
all or any portion of such furniture, fixtures, equipment and other
property to any person ("Claimant") claiming to be entitled to
possession thereof who presents to Lessor a copy of any instrument
represented to Lessor by Claimant to have been executed by Lessee (or
any predecessor of Lessee) granting Claimant the right under various
circumstances to take possession of such furniture, fixtures, equipment
or other property, without the necessity on the part of the Lessor to
inquire into the authenticity of said instrument's copy of Lessee's or
Lessee's predecessor's signature thereon and without the necessity of
Lessor making any nature of investigation or inquiry as to the validity
of the factual or legal basis upon which Claimant purports to act; and
Lessee agrees to indemnify and hold Lessor harmless from all cost,
expense, loss, damage and liability incident to Lessor's relinquishment
of possession of all or any portion of such furniture, fixtures,
equipment or other property to Claimant. The rights of Lessor herein
stated shall be in addition to any and all other rights which Lessor has
or may hereafter have at law or in equity; and Lessee stipulates and
agrees that the rights herein granted Lessor are commercially
reasonable.
(9) Nothing herein shall be construed to give rise to or create a
warehouseman's lien on or security interest in, any of Lessee's product
stored on the Premises.
13. ASSIGNMENT OR SUBLETTING - Lessee shall not sublet or assign the Lease
hereunder except with the written consent of Lessor which consent shall not be
unreasonably withheld. Such consent is not necessary if the Lease or assignment
is made to a subsidiary, affiliate or parent company of Lessee for storage of
the same products as stored by Lessee, but such consent and permission of
Lessor must be obtained for products which are not the same. Consent of the
Lessor will not be unreasonably withheld particularly if such products are
compatible and do not alter the physical character of the Building. Provided
the Lessee performs
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all its covenants, agreements, and obligations hereunder, the Lessee shall have
the peaceful and quiet enjoyment of the Premises without hindrance on the part
of Lessor and the Lessor will warrant and defend the Lessee in the peaceful and
quiet enjoyment of the Premises against the lawful claims of all persons
claiming by, through, or under Lessor.
14. ACCESS TO PREMISES -
(a) If a Materials Handling Service Agreement is in effect between
Lessor and Lessee regarding the Premises, Lessor and its representative
may, enter the Premises at all reasonable times for the purpose of: (1)
examining the same or to make any alterations or repairs to the Premises
that Lessor may deem necessary for safety or preservation of the facility;
(2) exhibiting the Premises for sale or mortgage financing; (3) during the
last six (6) months of the term of this Lease for exhibiting the Premises
and putting up the usual notice "to rent," which notice shall not be
removed, obliterated, or hidden by Lessee; and (4) performing under a
Materials Handling Service Agreement between Lessor and Lessee; provided,
however, that any such action by Lessor as aforesaid in this section shall
cause as little inconvenience to Lessee as reasonably practicable, and such
action shall not be deemed an eviction or disturbance of Lessee nor shall
Lessee be allowed any abatement of rent, or damage for an injury of
inconvenience occasioned thereby.
(b) If a Materials Handling Service Agreement is not in effect
between Lessor and Lessee, regarding the Premises, Lessor and its
representative may, upon notifying Lessee in writing at least twenty four
(24) hours in advance thereof, enter the Premises at all reasonable times
for the purpose of: (1) examining the same or to make any alterations or
repairs to the Premises that Lessor may deem necessary for safety or
preservation of the facility; (2) exhibiting the Premises for sale or
mortgage financing, and (3) during the last six (6) months of the term of
this Lease for exhibiting the Premises and putting up the usual notice "to
rent," which notice shall not be removed, obliterated, or hidden by Lessee,
provided, however, that any such action by Lessor as aforesaid in this
section shall cause as little inconvenience to Lessee as reasonably
practicable, and such action shall not be deemed an eviction or disturbance
of Lessee nor shall Lessee be allowed any abatement of rent, or damage for
an injury of inconvenience occasioned thereby.
15. DAMAGE OR DESTRUCTION
(a) If during the term of this Lease the Premises are damaged by fire or
other casualty, but not to the extent that Lessee is prevented from carrying on
business in the Premises, Lessor shall promptly cause the Premises and the
improvements thereon to be repaired or restored at its sole cost and risk to
substantially the condition in which they existed prior to such damage. If such
damage renders any portion of the Premises untenantable, the rent reserved
hereunder (except for variable rent) shall be reduced during the period of its
untenantability proportionately to the amount by which the area so rendered
untenantable bears to the entire area of the Premises, and such reduction shall
be apportioned from the date of the casualty to the date when the
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Premises is rendered fully tenantable. Provided, however, that if Lessor under
a Materials Handling Service Agreement then in existence between Lessor and
Lessee, can meet Lessee's service requirements for the Premises without
additional cost to Lessee, despite the damage to the Premises, then no
abatement of rent shall occur. Notwithstanding the foregoing, in the event
such fire or other casualty damages or destroys any of Lessee's leasehold
improvements, alterations, betterments, fixtures or equipment (exclusive of
any such leasehold improvements, alterations, betterments, fixtures or
equipment provided to Lessee by Lessor at Lessor's expense at the commencement
of this Lease, which shall be restored by Lessor), Lessee shall cause the same
to be repaired or restored at Lessee's sole expense (other than Lessee's
personal property or equipment, which Lessee may elect, in Lessee's sole
discretion, to repair or restore).
(b) If during the term of this Lease the Premises are rendered
wholly untenantable as a result of fire, the elements, or other casualty,
Lessor and Lessee shall cause such damage to be repaired in accordance with the
provisions of SUBSECTION 15(A). Such restoration shall be completed as
promptly as reasonably possible under the circumstances and the fixed rent
reserved hereunder shall xxxxx until the Premises are again rendered
tenantable. Notwithstanding the foregoing, in the event that it is reasonably
determined by Lessor and Lessee that the Premises cannot be repaired by Lessor
within one hundred twenty (120) days, and if Lessor is unable to provide
alternative, comparable warehouse space sufficient to meet Lessee's service
requirements without additional cost to Lessee, then Lessee shall have the right
to terminate this Lease by written notice to Lessor within thirty (30) days
after the date of such casualty.
16. CONDEMNATION
(a) If during the term of this Lease all or a substantial part of
the Premises are taken by or under power of eminent domain, this Lease shall
terminate as of the date of such taking, and the rent (fixed and variable)
shall be apportioned to and xxxxx from and after, the date of taking. Lessee
shall have no right to participate in any award or damages for such taking
and, subject to SECTION 16(D) below, hereby assigns all of its right, title and
interest therein to Lessor. For the purposes of this Section, "a substantial
part of the Premises" shall mean such part that the remainder thereof is
rendered inadequate for Lessee's business and that such remainder cannot
practicably be repaired and improved so as to be rendered adequate to permit
Lessee to carry on its business with substantially the same efficiency as
before the taking, as determined in Lessor's and Lessee's reasonable judgment.
(b) If during the term of this Lease less than a substantial part
of the Premises (as hereinabove defined) is taken by or under power of eminent
domain, this Lease shall remain in full force and effect according to its
terms, and Lessee shall not have the right to participate in any award or
damages for such taking and Lessee hereby assigns, subject to SECTION 16(D)
below, all of its right, title and interest in and to the award to Lessor. In
such event Lessor shall at its expense promptly make such repairs and
improvements as shall be necessary to make the remainder of the Premises
adequate to permit Lessee to carry on its business to substantially the same
extent and with substantially the same efficiency as before the taking. If as
a result of such
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taking any part of the Premises is rendered permanently unusable, the rent
reserved hereunder shall be reduced in such amount as may be fair and
reasonable, which amount shall not exceed the proportion which the area so taken
or made unusable bears to the total area which was usable by Lessee prior to
the taking. If the taking does not render any part of the Premises unusable,
there shall be no abatement of rent.
(c) For purposes of this Section "taking" shall include a negotiated
sale or lease and transfer of possession to a condemning authority under bona
fide threat of condemnation, and Lessor alone shall have the right to negotiate
with the condemning authority and conduct and settle all litigation connected
with the condemnation. As used herein, the words "award or damages" shall, in
the event of such sale or settlement, include the purchase or settlement price.
(d) Nothing herein shall be deemed to prevent Lessee from claiming and
receiving from the condemning authority, if legally payable, compensation for
the taking of Lessee's own tangible property and damages for Lessee's loss of
business, business interruption, or removal and relocation; provided such
compensation does not in any way decrease the amount of the award or damages to
which Lessor may be entitled by reason of such taking.
17. SUBORDINATION
(a) This Lease shall be subject to and subordinate at all times to the
lien of any mortgages and/or deeds of trust now or hereafter made on the
Premises and to all advances made or hereafter to be made thereunder (unless the
mortgagee or holder of the deed of trust elects to have Lessee's interest
hereunder superior to the interest of the mortgagee or holder of such deed of
trust) on and subject to the following conditions: (i) Lessee and the
respective mortgagee have entered into the Non-Disturbance Agreement
hereinafter described; (ii) the respective mortgagee shall agree in writing
that the lien of its mortgage shall be fully released upon exercise by Lessee of
its option to purchase hereunder and upon payment to said mortgagee of the
Purchase Price, or part thereof as is specified in writing by Lessor and said
mortgagee; and (iii) the mortgagee shall not interfere with, hinder or molest
Lessee's right of quiet enjoyment under this Lease, nor the right of Lessee to
continue to occupy the Premises, and all portions thereof, and to conduct its
business thereon and to be entitled to the rights, benefits and options
(including but not limited to options to renew and purchase) granted to Lessee
herein in accordance with the covenants, conditions, provisions, terms and
agreements of this Lease. Subject to the above conditions, Lessee agrees to
execute, within 10 days of Lessor's request therefor, any and all documents
which are desired to effect or confirm such subordination.
(b) As long as Lessee is paying the rent and observing and performing
all other terms as provided for in this Lease, the mortgagee, or if more than
one, mortgagees, shall not disturb Lessee's possession. To assure that Lessee's
quiet enjoyment of the Premises shall not be disturbed, Lessee and mortgagee
have entered, or in the case of mortgages filed after the date hereof, will
enter, into an agreement (the "Non-Disturbance Agreement") substantially in the
form attached hereto as EXHIBIT E and made a part hereof.
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(c) In the event that Lessor should at any time fail to pay any
installment or interest under any mortgage, or any other sum required to be
paid by Lessor, which failure constitutes a default under any mortgage so as
to permit a foreclosure thereof, Lessee, upon being notified by such mortgage of
Lessor's default, shall have the right, but not the obligation, to pay such
principle, interest or other sums of which Lessor is in default, and to deduct
the amount of such payment, along with the costs incurred by Lessee on account
of Lessor's default, from the successive installments of rent then due or
thereafter due, until Lessee is fully reimbursed for any and all such payments,
costs, expenses and interests.
18. RIGHT TO PERFORM COVENANTS - If Lessee shall fail to perform any
covenant or duty required of it by this Lease or by law or shall take any
action requiring Lessor's consent without having obtained such consent, Lessor
shall have the right (but not the obligation), after giving Lessee such notice
and right to cure as provided for herein, to perform such covenant or duty or
to take any action to terminate any acts of Lessee undertaken without Lessor's
consent, and if necessary to enter the Premises for such purposes without
notice. The cost thereof to Lessor shall be payable by Lessee, within 10 days
of Lessor's demand therefor, and Lessor shall have the same rights and remedies
with respect to such costs as for rent. If Lessor shall fail to perform any
covenant or duty required of it by this Lease or by law, Lessee shall have the
right (but not the obligation), upon thirty (30) days prior written notice to
Lessor, to perform such covenant. The cost thereof to Lessee shall be payable
by Lessor within ten (10) days after Lessee's demand therefor, and if Lessor
fails to so pay Lessee, Lessee shall have the right to offset such costs
against any and all rent due hereunder, or, in the event Lessee exercises the
option to purchase set forth in SECTION 4 of this Lease, to credit any and all
of said costs against the Purchase Price.
19. WATER AND OTHER DAMAGE - Unless caused by Lessor's intentionally
tortious act, Lessor shall not be liable for, and Lessor is hereby released and
relieved from, and Lessee hereby waives, all claims and demands of any kind by
reason of or resulting from, damage or injury to person or property of Lessee,
or any other party, directly or indirectly caused by (a) dampness, water, rain
or snow, in any part of the Premises or in any part of the building, the land,
or of any portion thereof leased to Lessee (whether attributable to roof
leakage or otherwise) and/or (b) any leak or break in any gas or electric line
in any part of the Premises, or any leak or break in any pipes, appliances or
plumbing, or from sewers, or from any other place or any part of the buildings,
Land, or any portion thereof leased to Lessee.
20. COVENANT OF QUIET ENJOYMENT - So long as the Lessee pays the rent, and
performs all of its obligations in this Lease, the Lessee's possession of the
Premises will not be disturbed by Lessor, or any party claiming by, through or
under Lessor.
21. LIMITATION ON TENANTS RECOURSE - The Lessee's sole recourse against the
Lessor, and any successor to the interest of the Lessor in the Premises, is to
the interest of the Lessor, and any such successor, in the Premises. The Lessee
will not have any right to satisfy any judgment which it may have against the
Lessor, or any such successor, from any other assets of
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the Lessor, or any such successor. In this Section the terms "Lessor" and
"successor" include the shareholders, venturers, and partners of "Lessor" and
"successor" and the officers, directors, and employees of "Lessor" and
"successor". The provisions of this section are not intended to limit the
Lessee's right to seek injunctive relief or specific performance, or the
Lessee's right to claim the proceeds of insurance (if any) specifically
required to be maintained by the Lessor hereunder. This provision will not be
applicable to losses, damages or liabilities suffered by Lessee arising out of
any fraud or willful or intentional misrepresentation in this Lease by Lessor
or other intentionally tortious act of Lessor.
22. MISCELLANEOUS - ESTOPPEL CERTIFICATES - Within no more than thirty (30)
days after written request by Lessor, Lessee will execute, acknowledge, and
deliver to Lessor a certificate stating (a) that this Lease is unmodified and
in full force and effect, or, if the Lease is modified, the way in which it is
modified accompanied by a copy of the modification agreement, (b) the date to
which rental and other sums payable under this Lease have been paid, (c) that no
notice has been received by Lessee of any default which has not been cured, or,
if such a default has not been cured, what Lessee intends to do in order to
effect the cure, and when it will do so, (d) that Lessee has accepted and
occupied the Premises, (e) that Lessee has no claim or offset against Lessor,
or, if it does, stating the circumstances which gave rise to the claim or
offset, (f) that Lessee is not aware of any prior assignment of this Lease by
Lessor, or, if it is, stating the date of the assignment and assignee (if known
to Lessee), and (g) such other matters as may be reasonably requested by
Lessor. Any such certificate may be relied upon by any prospective purchaser of
the Premises and any prospective mortgagee or beneficiary under any deed of
trust or mortgage encumbering the Premises. If Lessor submits a completed
certificate to Lessee, and if Lessee fails to object to its contents within
thirty (30) days after its receipt of the completed certificate, the matters
stated in the certificate will conclusively be deemed to be correct.
Furthermore, Lessee irrevocably appoints Lessor as Lessee's attorney-in-fact to
execute and deliver on Lessee's behalf any completed certificate to which
Lessee does not object within thirty (30) days after its receipt.
23. HOLDING OVER - At the termination of this Lease by lapse of time,
Lessee shall forthwith surrender possession of the Premises or, failing to do
so, shall pay, at the election of Lessor, for each day possession is withheld,
double the Fixed Rental herein to be paid by Lessee hereunder. The provisions
of this Section shall not be held to be a waiver by Lessor of any right of
re-entry, nor shall the receipt of such double rent, or any other act in
apparent affirmance of the tenancy, operate to create a periodic tenancy or a
tenancy at will or as a waiver of the right to terminate this Lease at any time.
24. USE OF PROPERTY
(a) Manner of Use - Lessee shall not cause or permit the property
to be used in any way which constitutes a violation of any law, ordinance, or
governmental regulation or order, or which constitutes a nuisance or waste.
Lessor shall obtain and pay a Certificate of Occupancy and Lessee shall obtain
and pay for all other permits, including floor tax or personal property tax.
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required for or related to Lessee's occupancy of the property and shall promptly
take all actions necessary to comply with all applicable statutes, ordinances,
rules, regulations, orders and requirements regulating or required as a direct
result of, the Lessee's use of or activities conducted on the Premises,
including the Occupational Safety and Health Act, federal, state and local
environmental laws and regulations, and the Americans with Disabilities Act.
Lessee shall use the Premises as a warehouse for food products and
other products dealt in by Lessee or its affiliates so long as compatible with
the operation of the Premises as a food warehouse.
Lessee may not make material changes, alterations, or improvements to
the Premises without Lessor's written approval, which approval shall not be
unreasonably withheld.
(b) HAZARDOUS MATERIALS - As used in this Lease, the term
"Hazardous Materials" means any flammable items, explosives, radioactive
materials, hazardous or toxic substances, material or waste or related
materials, including any substances defined as or included in the definition of
"hazardous substances", "hazardous wastes", "hazardous materials" or "toxic
substances" now or subsequently regulated under any applicable federal, state
or local laws or regulations, including without limitation petroleum-based
products, paints, solvents, lead, cyanide, DDT, printing inks, acids,
pesticides, ammonia compounds and other chemical products, asbestos, PCBs and
similar compounds, and including any different products and materials which are
subsequently found to have adverse effects on the environment or the health and
safety of persons. Lessee shall not cause or permit any Hazardous Material
(other than insecticides, pesticides and other substances used in the ordinary
course of Lessee's business for pest control, if used in accordance with
government standards for a food warehouse) to be generated, produced, brought
upon, used, stored, treated or disposed of in or about the Premises by Lessee,
its agents, employees, contractors, sublessees or invitees without the prior
written consent of Lessor.
Lessee represents and warrants that Lessee shall defend, indemnify and
hold Lessor harmless from and against any and all claims, damages, demands,
actions, causes of action, costs and expenses, including fines, penalties and
reasonable attorney fees, on account of, or in any way relating to Hazardous
Materials introduced to or used upon the Premises by Lessee.
25. COMPATIBLE WAREHOUSE CUSTOMERS - Lessor hereby agrees that if and to
the extent Lessee does not need or use all of the Premises in connection with
the warehousing of its products, Lessor will use its best efforts to obtain
additional compatible warehouse customers for the Premises to utilize space not
needed by Lessee in connection with its use of the Premises. Such additional
warehouse customers and the length of their respective lease, storage or
warehouse agreement shall be subject to the prior written approval of Lessee.
All storage charges paid by such additional warehouse customers shall be
applied to reduce the amount of Fixed Rental and Variable Rental payable by
Lessee hereunder.
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26. ENTIRE AGREEMENT - This Lease contains the entire agreement between the
parties and any executory agreement hereafter made shall be ineffective to
change, modify or discharge the Lease in whole or in part unless such executory
agreement is in writing and signed by both of the parties hereto.
27. GOVERNING LAW - This Lease shall be interpreted and enforced in
accordance with and governed by the laws of the State of South Carolina, and
any litigation which may arise shall be litigated in the State of Missouri,
except that any litigation affecting possession of, or an estate in, the
Premises requiring enforcement in South Carolina shall be litigated in South
Carolina.
28. NOTICES - Notices and demands shall be given by Certified Mail at the
addresses below, or at such other address as either party may by notice
designate:
LESSEE: AMERICAN ITALIAN PASTA COMPANY
0000 Xxxxxxx Xxx
Xxxxxxxxx Xxxxxxx, XX 00000
LESSOR: XXXXXX COMPANY
0000 XXXXXXXXXXXX XXXXXX
XXXXXXX, XX 00000
ATTENTION: PRESIDENT
29. SURVIVAL OF OBLIGATIONS - All obligations of Lessee or Lessor which by
their nature involve performance, in any particular, after the end of the term,
or which cannot be ascertained to have been fully performed until after the
term of this Lease has expired or been terminated, and all representations,
warranties and indemnifications set forth herein, shall survive the expiration
or sooner termination of the term of this Lease.
30. REPRESENTATIONS AND WARRANTIES OF LESSOR -
(a) Lessor is a Delaware corporation, duly organized validly existing
and in good standing in the State of South Carolina. Lessor has full right and
authority to enter into this Lease for the full term hereof and has taken all
action necessary to authorize this Lease.
(b) All utilities necessary for the use and operation of the Premises
under this Lease are available at the Premises.
(c) Lessor has not dealt with or used any real estate agent or broker
in connection with this Lease.
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(d) To the best of Lessor's knowledge, the Premises are in compliance with
all applicable statutes, ordinances, rules, regulations, orders and other
governmental requirements. The Premises shall be constructed by Lessor in
accordance with all applicable building codes, laws and regulations.
31. SIGNS. Lessee shall have the right to erect such signs on the Premises
as it desires.
32. EXPANSION OF PREMISES. Lessor acknowledges and agrees that it agreed to
construct the Building and to enter into this Lease with Lessee on the
understanding that Lessee may desire, during the Initial Term or any renewal
term of this Lease, that the Building described in this Lease be expanded to
accommodate the distribution and warehouse needs of Lessee. Lessor, upon written
notification by Lessee, agrees to finance and construct any such expansion of
the Building as desired by Lessee, and such expansion space (the "Expansion
Space") shall be deemed to be a part of the Premises and shall be leased to
Lessee on the same terms and conditions as set forth in this Lease, except for
(i) Fixed Rental, which shall be adjusted to reflect the cost to Lessor of
constructing the Expansion Space and shall be negotiated in good faith by Lessor
and Lessee, and (ii) the Purchase Price under SECTION 4 hereof, which also shall
be accordingly adjusted by agreement of the Lessor and Lessee. Upon completion
of the Expansion Space, Lessor and Lessee shall execute an addendum to this
Lease reflecting the correct legal description of the Premises, including the
Expansion Space, the revised Purchase Price under SECTION 4, and the revised
Fixed Rental, and shall also execute and record an amendment to the Memorandum
of Lease to reflect the foregoing.
33. ARBITRATION. Except for a dispute relating to a failure by Lessee to
pay Fixed Rental herein, in the event of any dispute between the parties
regarding any matter arising under this Lease, Lessor and Lessee will make a
sincere and xxxxxxx effort to resolve and settle such dispute by friendly and
good faith negotiation and discussion. If, despite such cooperative effort, any
such dispute cannot be resolved within thirty (30) days, the dispute shall
thereafter, upon ten (10) days' prior written notice from one party to the
other, be submitted and settled by arbitration. Such arbitration shall be
effected by arbitrators selected as provided below and shall be conducted in
accordance with the rules of the American Arbitration Association existing at
the time of submission and in accordance with the laws of the State of South
Carolina.
The dispute shall be submitted to three (3) arbitrators, one of whom
shall be selected by the Lessor, one of whom shall be selected by Lessee, and
the third of whom shall be selected by the two arbitrators so selected, or if
they cannot agree, such third arbitrator shall be selected by the American
American Arbitration Association. In the event either Lessor or Lessee, within
thirty (30) days after any notice of arbitration referred to above shall not
have selected its arbitrator and given notice thereof to the other party, such
arbitrator shall be selected by the American Arbitration Association. Any
necessary arbitration hearings shall be conducted, unless otherwise agreed by
all of the arbitrators in Columbia, South Carolina. The costs of arbitration
shall be assumed and paid one-half by Lessor and one-half by Lessee, but the
individual costs and expenses of each party (including attorneys' fees) shall
be assumed and paid by the party incurring the same.
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34. ADDENDUM TO LEASE - Upon execution by Lessor and Lessee of the easement
referenced on EXHIBIT A attached hereto, the parties shall execute an addendum
to this Lease amending EXHIBIT A to include the legal description of and
reference to said easement.
IN WITNESS WHEREOF, the parties hereto executed this document as of
the date above first written.
THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE
ENFORCED BY THE PARTIES.
WITNESSED BY: LESSOR: XXXXXX COMPANY
/s/ Illegible By Xxxxx X. Xxxxxx
-------------------------- ---------------------------
CEO
VP FINANCE
--------------------------
WITNESSED BY: LESSEE: AMERICAN ITALIAN PASTA
COMPANY
/s/ Xxxxx X. Xxxxxx By /s/ Xxxxxxx X. Xxxxxxx
-------------------------- ----------------------------
CEO
VP FINANCE
--------------------------
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