SUBLEASE AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as of November
1, 1999 by and between DAMARK INTERNATIONAL, INC. a Minnesota corporation
("Sublessor"), and XPEDX, a division of International Paper Company, a New York
corporation ("Sublessee").
RECITALS
A. Sublessor is the tenant under a certain lease agreement (together
with amendments) attached hereto as Exhibit A (the "Main Lease") between
Sublessor and First Industrial, L.P., a Delaware limited partnership (the
"Landlord");
B. The Lease describes certain leased premises located at 0000
Xxxxxxxx Xxxxxx Xxxxx, Xxxxxxxx Xxxx, Xxxxxxxxx and legally described in the
Lease (the "Premises").
C. Sublessee desires to sublet approximately 99,925 square feet of
warehouse space and 200 square feet of office space (for a total 100,125
square feet) within the Premises which space is outlined on the attached
Exhibit B (the "Subleased Premises").
D. Sublessor agrees to sublet the Subleased Premises in
accordance with the terms and conditions set forth herein.
AGREEMENT
In consideration of the mutual promises of the parties set forth in this
Agreement and other valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Sublessor and Sublessee agree as follows:
1. SUBLEASE OF SUBLEASED PREMISES. Sublessor hereby leases to
Sublessee, and Sublessee hereby takes from Sublessor, the Subleased Premises
including the exclusive right to the use of the 13 dock doors specified on
Exhibit B and the non-exclusive right of ingress, egress and parking with the
understanding that Sublessee shall have the right to use no more than thirty
(30) parking spaces. Notwithstanding anything to the contrary contained
herein, Sublessor and its employees and agents shall have the right of
ingress and egress through that portion of the Subleased Premises
crosshatched on Exhibit B and labeled the Damark Corridor. Sublessor agrees
that it will defend, indemnify and hold Sublessee harmless from and against
any claims, actions, liabilities, damages or the like of any kind or nature
arising from the use of the Damark Corridor by Sublessor and its employees
and agents unless caused by the negligence of Sublessee or its employees and
agents.
2. TERM. The term of this Agreement (the "Term") shall commence
on November 1, 1999 (the "Commencement Date"), and shall continue through
June 30, 2002 subject to extension or earlier termination as set forth in
this Agreement. Notwithstanding anything to the contrary contained herein,
Sublessor and Sublessee agree that Sublessor will deliver 66,000
square feet of the Subleased Premises to Sublessee on the Commencement Date
and the balance of the space on or before December 13, 1999 ("Final Delivery
Date"). The Term may be extended to June 30, 2003 in the event Sublessor
elects such extension which election will be made and notice thereof given to
Sublessee no later than September 1, 2001.
3. USE. Sublessee shall use the Subleased Premises for warehouse
and office and for no other purpose. Sublessee shall use the Subleased
Premises in compliance with all applicable federal, state and local laws,
regulations and ordinances. Sublessee shall not allow any items on the
Subleased Premises that (i) increase the premiums of Landlord's hazard or
liability insurance; (ii) exceed the load capability of the floor of the
warehouse; or (iii) are deemed to be hazardous substances, as that term is
defined in Federal and State laws and regulations. Additionally, Sublessee
will comply with the terms of the xpedx Operating Guidelines attached hereto
as Exhibit C.
4. RENT. During the Term, Sublessee agrees to pay Sublessor rent in
the amount of $5.50 per square foot per year which shall be payable in the
increments set forth below:
Commencement Date to
Final Delivery Date: $994.52 per day ("Initial Rent")
Final Delivery Date through
the end of the Term: $45,890.63 per month ("Base Rent")
On the Commencement Date, Sublessee shall pay an amount equal to the
daily Initial Rent multiplied by 30 days. On December 1, 1999, Sublessee
shall pay an amount equal to the daily Initial Rent multiplied by 13 days
plus $27,534.38 (the daily amount of the monthly Base Rent multiplied by 18
days). Beginning January 1, 2000, the Base Rent shall be due in advance on
the first day of each month. All rent payments due hereunder shall be paid
in advance without notice, demand, setoff or deduction to Sublessor at the
address set out in Section 13 hereof or at such place as Sublessor may
designate from time to time by written notice to Sublessee. A late charge of
2% will be added to any payment not received by the 10th day after it is due.
5. MAIN LEASE.
(a) Except as inconsistent with the provisions of this
Agreement, the terms, provisions, covenants and conditions of the Main
Lease are incorporated herein by reference in like manner as thought he
same were specifically set forth herein. Sublessee assumes and agrees to
keep and perform all of those obligations, conditions and covenants of
the tenant set forth under the Main Lease as though Sublessee were
substituted as tenant thereunder, except for those provisions set forth
in the following sections of the Main Lease: Article 1; Sections 2.1
through 2.6.
It is agreed and understood between the parties hereto that the Sublessee
obtains and is granted no more rights and privileges under this Agreement
than Sublessor has as tenant
2
under the Main Lease.
(b) The obligations, conditions and covenants of the
Landlord under the Main Lease shall remain the Landlord's, and
Sublessor shall not be required to perform the same in the event of a
default by the Landlord. Notwithstanding the foregoing, the Sublessor
shall have all the rights and privileges of the Landlord under the
Main Lease as it relates to Sublessee and the Subleased Premises
except as herein otherwise specifically provided. In the event the
Landlord is in default of its obligations under the Main Lease,
Sublessor agrees to use its reasonable best efforts to cause the
Landlord to perform its obligations under the Main Lease. In the
event Landlord shall have failed to cure its default after a
reasonable period of time and such default materially and adversely
affects the use of the Premises by Sublessee, Sublessee shall have the
right to terminate this Sublease so long as such default by the
Landlord continues.
(c) Sublessee agrees not to do or suffer or permit anything to
be done which would result in default under the Main Lease or cause the
Main Lease to be terminated or forfeited.
6. CONDITION OF THE SUBLEASED PREMISES. Sublessee hereby accepts
the Subleased Premises in "AS IS" condition with all patent and latent
defects. Sublessee may make those improvements set forth on Exhibit C
attached hereto provided such improvements comply with all applicable laws
and codes, are done in a safe and workmanlike manner and the costs therefor
are paid promptly by Sublessee so that no lien is placed against the
Subleased Premises. Sublessee shall remove all such improvements upon
termination of the Term and restore the Subleased Premises to their prior
condition, normal wear and tear excepted. Other than the improvements
specified on Exhibit C, Sublessee will make no alterations or improvements to
the Subleased Premises without the written consent of Sublessor and in
accordance with the terms of the Main Lease. Sublessee will maintain the
Subleased Premises in good condition and repair.
7. INSURANCE. Sublessee will carry the following insurance
policies: (a) liability insurance naming Damark and Landlord as additional
insureds in the amount of no less than $1,000,000; (b) a workers compensation
insurance certificate; and (c) casualty insurance covering all equipment and
personal property that Sublessee will store or keep in the Subleased
Premises. With regard to the casualty insurance, Sublessee shall cause its
insurer(s) to waive any rights of subrogation against the Landlord and
Sublessor.
8. UTILITIES AND JANITORIAL SERVICES. The Initial Rent and Base
Rent include the cost of gas for heating and electricity for lighting based
on normal business usage. Should Sublessee's usage of either exceed normal
usage, such additional amount will be paid by Sublessee on demand. Sublessee
shall be responsible for its own security, trash removal and janitorial
services.
9. INDEMNIFICATION. Sublessee agrees that it will defend,
indemnify and hold Sublessor and Landlord harmless from and against any
claims, actions, liabilities, damages or the like of any kind or nature
arising from Sublessee's use or occupation of the Subleased Premises or in
connection with or as a result of Sublessee's failure to comply with any
terms of this
3
Agreement, unless caused by the negligence of the Landlord, Sublessor or
their employees or agents.
10. ASSIGNMENT. Sublessee shall not transfer, sell, assign or
pledge this Agreement or further sublease the Subleased Premises, or any part
thereof without approval of the Sublessor and the Landlord; provided,
however, that Sublessor and Landlord hereby consent to the assignment of this
Agreement to Target Stores or to Xxxxxx Xxxxxx Corporation upon delivery of
appropriate assignment and assumption documents, reasonably acceptable to
Sublessor and Landlord.
11. SURRENDER OF THE SUBLEASED PREMISES. Upon the expiration of the
Term of this Agreement, or any sooner termination hereof, Sublessee shall quit
and surrender the Subleased Premises in good condition and repair, normal wear
and tear excepted.
12. DEFAULT AND REMEDIES.
(a) If any one or more of the following events occurs, then
Sublessee shall be deemed to be in default under this Agreement:
(i) Sublessee fails to pay the rent, or any other amount
payable to Sublessor as provided under this Agreement within ten
(10) days after such rent or amount is due to be paid; or
(ii) Sublessee fails to keep, observe or perform any of
the other terms, covenants and conditions herein to be kept,
observed and performed by Sublessee under this Agreement for more
than twenty (20) days after written notice is given to Sublessee
specifying the nature of such default;
(b) If a default occurs, then Sublessor shall be entitled to
exercise any and all of the rights and remedies provided to the Landlord
under the Main Lease, including, without limitation, the right to
terminate this Agreement. Any remedies under this Agreement shall not be
deemed exclusive, but shall be cumulative and shall be in addition to all
other remedies available to Sublessor existing at law or in equity.
13. NOTICES. Any notice which one party wishes or is required to give
to the other party will be regarded as effective if in writing and either
delivered personally to such party or sent certified or registered mail, return
receipt requested postage pre-paid to the addresses below, or such other
addresses as either party may, from time to time, designate by written notice to
the other party:
Sublessor: Damark International, Inc.
0000 Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxxx Xxxx, Xxxxxxxxx 00000
4
Sublessee: xpedx
Legal Department
00 Xxxx Xxxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
With a copy to:
International Paper Land Utilization
0 Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
The effective date will be the day of personal delivery or three (3) days after
being sent by certified or registered mail.
14. RELATIONSHIP OF THE PARTIES. Nothing contained in this
Agreement shall be deemed or construed by the parties hereto or by a third
party to create the relationship of principal and agent or of partnership or
joint venture or of any association whatsoever between Sublessor and
Sublessee. It is hereby expressly understood and agreed that neither the
method of computation of rent or any other provisions contained in this
Agreement, nor any act or acts of the parties hereto shall be deemed to
create any relationship between Sublessor and Sublessee other than the
relationship of Sublessor and Sublessee.
15. INVALIDITY. If any part of this Agreement or any part of any
provision hereof shall be adjudicated to be void or invalid, then the
remaining provisions hereof, not specifically so adjudicated to be invalid,
shall be executed without reference to the part or portion so adjudicated,
insofar as such remaining provisions are capable of execution.
16. IMPORTANCE OF EACH COVENANT. Each covenant and agreement on the
part of one party is understood and agreed to constitute an essential part of
the consideration for each covenant and agreement on the part of the other
party.
17. CONDITIONS. This Agreement is dependent and conditioned upon the
Landlord consenting in writing to this Agreement.
18. SUCCESSORS AND ASSIGNS. This Agreement and all covenants and
agreements contained herein shall be binding upon, apply and inure to the
benefit of the respective successors and assigns of the parties to this
Agreement, subject to the restrictions imposed under this Agreement and the Main
Lease relating to assignment by the Sublessee.
19. NON-WAIVER. Sublessor's or Sublessee's failure to insist upon
strict performance of any covenant of this Agreement or to exercise any
option or right herein contained shall not be a waiver or relinquishment for
the failure of such covenant, right or option, but the same shall remain in
full force and effect. Sublessor is specifically authorized to accept a
partial payment (no matter how such payment may be labeled or conditionally
delivered) without such acceptance being deemed a waiver of the balance of
the amount owed.
5
20. APPLICABLE LAW. This Agreement shall be construed under the laws
of the State of Minnesota.
21. ENTIRE AGREEMENT AND AMENDMENTS. This Agreement and the Exhibits
attached hereto (including the Main Lease), set forth all of the covenants,
promises, agreements, conditions and understanding between Sublessor and
Sublessee concerning the Subleased Premises and there are no other covenants,
promises, agreements, conditions or understandings, either oral or written,
between them other than those which are set forth in this Agreement. Except as
otherwise provided herein, no subsequent alteration, amendment, change or
addition to this Agreement shall be binding upon the Sublessor or the Sublessee
unless reduced in writing and signed by both parties.
22. COUNTERPARTS. This Agreement may be separately executed as
counterparts which shall be then read together and enforced.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above-written.
SUBLESSOR: DAMARK INTERNATIONAL, INC.
By: /s/ Xxxx X. Xxxx
-------------------------------------
Its: Chairman/CEO
----------------------------------
SUBLESSEE: XPEDX, A DIVISION OF INTERNATIONAL PAPER
COMPANY
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------------------
Its: Controller, xpedx
-------------------------------------
The undersigned Landlord under the main Lease hereby consents to this
Sublease Agreement.
FIRST INDUSTRIAL, L.P.
By: /s/
------------------------------
Its: Regional Director
---------------------------
6
EXHIBIT A
MAIN LEASE
EXHIBIT B
SITE PLAN DESIGNATING SUBLEASED PREMISES, LOADING DOCKS USED BY SUBLESSEE AND
DAMARK CORRIDOR
EXHIBIT C
XPEDX OPERATING GUIDELINES
