1
EXHIBIT 10.5
WAREHOUSE LEASE
Agreement of Warehouse Lease made the 2nd day of September, 1997,
between XXXXXX COMPANY, a Delaware corporation, having its principal office at
0000 Xxxxxxxxxxxx Xxxxxx, Xxxxxxx, XX 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 121,752 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 May 22, 1997,
prepared by ASI Incorporated for Xxxxxx Company in Columbia, South Carolina,
(the "Plans and Specifications"). The Building, when fully racked, shall have a
gross storage capacity of approximately 23,212 pallet positions based on
seven-high stacking configuration in a double-deep racking system.
1. TERM - The initial term of this Lease ("Initial Term") shall be for 12
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 December 1, 1997. 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.
2
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 = $740,000.00 per year for the Initial Term,
Payable $61,666.67 per month.
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 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
2
3
reimburse Lessor for said maintenance expenses within 15 days of Lessee's
receipt of said statements.
(c) Extension Term. Rent for any extension 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 LEASES 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 in 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
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 mortgagee.
(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
hereinafter 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:
3
4
(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 $5,079,000.00.
(ii) From the second anniversary date but before the third anniversary
date $4,843,000.00.
(iii) From the third anniversary date but before the fourth
anniversary date $4,585,000.00.
(iv) From the fourth anniversary date but before the fifth
anniversary date $4,303,000.00.
(v) From the fifth anniversary date but before the sixth anniversary
date $3,992,000.00.
(vi) From the sixth anniversary date but before the seventh
anniversary date $3,654,000.00.
(vii) From the seventh anniversary date but before the eighth
anniversary date $3,284,000.00.
(viii) From the eighth anniversary date but before the ninth
anniversary date $2,879,000.00.
(ix) From the ninth anniversary date but before the tenth anniversary
date $2,436,000.00.
(x) From the tenth anniversary date but before the eleventh
anniversary date $1,951,000.00.
(xi) From the eleventh anniversary date but before the twelfth
anniversary date $1,420,000.00.
(xii) From the twelfth 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.
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.
4
5
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
$4,492,000.00.
(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
$4,154,000.00.
(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
$3,784,000.00.
(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
$3,279,000.00.
(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
$2,936,000.00.
(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
$2,451,000.00.
(vii) From the eleventh anniversary date of the Commencement
Date of this Lease but before the twelfth anniversary date of the
Commencement Date of this Lease, the purchase price shall be
$1,920,000.00.
(viii) From the twelfth 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 $1,500,000.00.
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
5
6
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
(v) any other documents and instruments, or agreements as may
be required in furtherance 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
6
7
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 and 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.
f) If Lessor receives any insurance proceeds due to damage to or
destruction of the Premises, or condemnation award for the Premises, then the
Purchase Price shall be reduced to the extent Lessor retains such proceeds or
award and does not restore the Premises to its original or equivalent condition.
g) Notwithstanding anything else contained herein, the purchase rights
of Lessee herein shall not terminate hereunder until (i) an Event of Default by
Lessee has occurred hereunder and (ii) sixty (60) days have elapsed from the
date Lessor gave written notice to Lessee of the occurrence of an Event of
Default, and either (iii) this Lease has terminated or (iv) Lessee's right of
occupancy of the Premises under the Lease has been terminated. Lessee's purchase
rights shall also terminate when (i) the Initial Term or any option term expires
and Lessee has given written notice to Lessor that it will not renew the Lease
pursuant to Section 2 hereof, or (ii) the third option period has expired.
5. FIRST MONTH'S RENT AND DEPOSIT - Lessee shall deposit upon execution of
this Lease $61,666.67 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 or any
tax or assessment by appropriate proceedings, timely instituted, provided that
(a) Lessee gives 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
7
8
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.
(ii) Lessor shall also provide a standard form Warehousemen'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
Warehousemen's Legal Liability Insurance under the condition stated in
subparagraph (ii) above.
(b) Indemnification - Liability Insurance
8
9
(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 successors 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 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 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 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
9
10
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.
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
10
11
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 effectively 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 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.
(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
11
12
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, 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
12
13
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.
(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
13
14
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
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 Promises 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; (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.
14
15
(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, (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 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
15
16
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 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.
16
17
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 or 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 ten (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.
(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 mortgagee 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 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 ten (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
17
18
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 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
18
19
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,
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
19
20
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.
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
X. 0. Xxx 00
Xxxxxxx, XX 00000
Attention: President
20
21
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.
(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
21
22
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 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 attorney's fees) shall be assumed and paid by the party
incurring the same.
34. OPERATING AGREEMENT. The Lessor and Lessee have entered into an Operating
Agreement dated _____, 1997 ("Operating Agreement" also referred to herein as
the Materials Handling Service Agreement), pursuant to which the Lessor shall
operate the Premises for the Lessee. The parties agree that no default under
the Operating Agreement by the Lessor shall result in a default in the Lessee's
obligation hereunder. In the event of a conflict between the obligations of the
parties hereunder and their obligations under the Operating Agreement, the
obligations under the Operating Agreement shall govern, but only if the
Operating Agreement is in effect.
IN WITNESS WHEREOF, the parties hereto have executed this document as of
the date above first written.
22
23
THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE
ENFORCED BY THE PARTIES.
WITNESSED BY: LESSOR: XXXXXX COMPANY
Xxxxxx X. Xxxxxx By: Xxxxx Xxxxxx
-------------------------- ---------------------------
Admin. Assistant President & COO
-------------------------- ------------------------------
Title Title
WITNESSED BY: LESSEE: AMERICAN ITALIAN PASTA
COMPANY
X. X. Xxxxxxx By: Xxxxx Xxxxxx
--------------------------- ---------------------------
President EXEC VP & CFO
--------------------------- ------------------------------
Title Title
23
