Exhibit 10.5
LEASE
THIS LEASE entered into this 4th day of October, 2002, by and between
LJH, LTD., a Texas limited partnership, having an office at 000 Xxxx Xxxx,
Xxxxxxx, Xxxxx 00000 (hereinafter referred to as "LANDLORD") and AIRCRAFT
INTERIOR DESIGN, INC., a Florida corporation having an office at 0000 Xxxx
Xxxxx, Xxxxxx, Xxxxxx Xxxxxx, Xxxxx 00000 (hereinafter referred to as "TENANT").
Upon the terms and subject to the conditions hereinafter set forth, the
Landlord leases to the Tenant and the Tenant leases from the Landlord, the
property hereinafter described:
1. THE LEASED PREMISES
(a) The property hereby leased to the Tenant is the tract
or tracts of land (hereinafter referred to as the "LAND") situated in the City
of Dallas, County of Dallas, and State of Texas more particularly described in
SCHEDULE "A" annexed hereto and by this reference made a part hereof, together
with the buildings and other improvements now or hereafter located thereon
(hereinafter collectively referred to as the "IMPROVEMENTS").
The Land and Improvements leased hereunder together with all
appurtenances thereto, hereinafter sometimes collectively referred to as the
"LEASED PREMISES", are demised and let subject to (a) the rights of any parties
in possession thereof and the existing state of the title thereof as of the
commencement of the term of this Lease, (b) any state of facts which an accurate
survey or physical inspection thereof might show, (c) all zoning regulations,
restrictions, rules and ordinances, building restrictions and other laws and
regulations now in effect or hereafter adopted by any governmental authority
having jurisdiction and (d) with respect to the Improvements, their condition as
of the commencement of the term of this Lease, without representation or
warranty by Landlord. Tenant represents to Landlord that Tenant has examined the
title to and the physical condition of the Leased Premises prior to the
execution and delivery of this Lease and has found the same to be satisfactory
for all purposes hereof, and Tenant accepts the title and condition of the
Leased Premises in their respective, present condition "AS-IS, WHERE-IS, WITH
ALL FAULTS".
Landlord makes no representation or warranty with respect to the
condition of the Leased Premises or its fitness or availability for any
particular use, and Landlord shall not be liable for any latent or patent defect
therein.
2. TERM The term of this Lease shall be for a period commencing
on October 4, 2002 (the "COMMENCEMENT DATE") and terminating on the tenth (10th)
anniversary thereof, plus the number of days necessary to end the term on the
last day of a calendar month or on such earlier date upon which said term may
expire or be terminated pursuant to any of the conditions of limitation or other
provisions of this Lease or pursuant to the provisions of any present or future
constitution, law, statute, ordinance, rule, regulation, other governmental
order or controlling judicial determination of any federal, state, local,
municipal or other governmental
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body, agency or authority having or asserting jurisdiction and all departments,
commissions, boards and officers thereof (hereinafter collectively referred to
as the "LAWS").
3. FIXED ANNUAL MINIMUM RENTAL. Tenant covenants to pay Landlord,
without previous demand therefor and without any setoff or deduction whatsoever,
in lawful money of the United States of America, a net fixed annual minimum rent
(the "Minimum Rental") of $285,980 for years one (1) through five (5) of the
term of this Lease, payable in equal monthly installments of $23,831.67; and
beginning in year (6) of the Lease term, Minimum Rent of $300,279 for years six
(6) through ten (10) of the term of this Lease, payable in equal monthly
installment of $25,023.25, each monthly payment hereunder being paid in advance
on or before the first (1st) day of each and every calendar month during the
term of this Lease. In the event that the term of this Lease does not commence
on the first day of a calendar month, the installment of Minimum Rental for the
partial calendar month at the commencement of the term of this Lease shall be
prorated on the basis of the number of days of the term within such calendar
month. The first installment of Minimum Rental shall be paid simultaneously with
the execution of this Lease. Landlord may, at its option, direct Tenant to pay
all or any portion of the Minimum Rental directly to the holder of any mortgage
on the Leased Premises and to pay the balance of the Minimum Rental, if any, to
Landlord.
4. UTILITIES Tenant shall furnish, at its own expense, all
utilities of every type and nature required by it in its use of the Leased
Premises and shall pay or cause to be paid, when due, all bills for water,
sewerage, heat, gas, electricity and other utilities, if any, used on, in
connection with, or chargeable against the Leased Premises until the termination
of this Lease and all bills for utility charges relating to the Leased Premises
or the use thereof and imposed on users of utilities, whether or not such
charges shall relate to services or benefits available to the Tenant during the
term of this Lease, and the Tenant shall indemnify and save harmless the
Landlord from and against any loss, cost and expense in connection therewith.
5. ADDITIONAL RENT
(a) It is the purpose and intent of the Landlord and
Tenant that the rent payable hereunder shall be absolute net to the Landlord so
that this Lease shall yield, net to the Landlord, the rents specified herein in
each year during the term of this Lease, free of any charges, assessments,
impositions or deductions of any kind and without abatement, deduction or
set-off whatsoever and under no circumstances or conditions, whether now
existing or hereafter arising, or whether beyond the present contemplation of
the parties, shall Landlord be expected or required to make any payment of any
kind whatsoever or be under any other obligation or liability hereunder, except
as herein otherwise expressly set forth. Tenant shall pay all costs, expenses,
and charges of every kind and nature relating to the Premises, except debt
service on any indebtedness of Landlord, which may arise or become due or
payable during or after (but attributable to a period falling within) the Term.
(b) Tenant covenants to pay, before any fine, penalty,
interest or cost may be added thereto for the nonpayment thereof, as additional
rent, all taxes, assessments (including but not limited to, all assessments for
public improvements or benefits, whether or not commenced
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or completed within the term of this Lease), water, sewer and other rents, rates
and charges, charges for public utilities, excises, levies, license and permit
and inspection fees and other governmental charges, general and special,
ordinary and extraordinary, foreseen and unforeseen, of any kind and nature
whatsoever, which at any time prior to or during the term of this Lease may have
been or may be assessed, levied, confirmed, imposed upon, or grow or become due
or payable out of or in respect of, or become a lien on, the Leased Premises or
any part thereof or any appurtenance thereto, any personal property, the rent
and income received by Tenant from subtenants, any use, possession or occupation
of the Leased Premises, or rentals or sales therefrom or activity conducted
therein, such franchises as may be appurtenant to the use or occupation of the
Leased Premises, this transaction or any document to which Tenant is a party
creating or transferring any right, title or interest or estate in the Leased
Premises (all of the foregoing, together with any and all penalties and/or
interest thereon, and together with any and all Premiums, being hereinafter
sometimes collectively referred to as "Impositions", and any of the same being
hereinafter sometimes referred to as an "Imposition"). Nothing herein contained
shall require Tenant to pay income taxes assessed against Landlord, or any
capital levy, corporation franchise, excess profits, estate, succession,
business inheritance or transfer taxes of Landlord, unless such taxes are
imposed or levied upon or assessed as a total or partial substitute for, or in
lieu of, any other Imposition required to be paid by Tenant pursuant to this
Section 5(b), in which event same shall be deemed Impositions and shall be paid
by Tenant; provided, however, that if at any time during the term of this Lease,
the method of taxation shall be such that there shall be levied, assessed or
imposed on Landlord a capital levy, gross receipts or other tax directly on the
rents received therefrom and/or a franchise tax or an assessment, levy or charge
measured by or based, in whole or in part, upon such rents, the Leased Premises
(including but not limited to the acquisition, leasing, use, or value thereof)
or the present or any future Improvements on the Leased Premises or the
construction thereof and/or measured in whole or in part by Landlord's income
from the Leased Premises if in computing such income there is not allowed as a
deduction any significant portion of the depreciation or interest deductions
allowed for federal income tax purposes, then all such taxes, assessments,
levies and charges, or the part thereof so measured or based, shall be deemed to
be included within the term "Imposition" for the purposes hereof, but only to
the extent that such taxes would be payable if the Leased Premises were the only
property of Landlord, and Tenant shall pay and discharge the same as herein
provided in respect of the payment of Impositions. Tenant shall furnish to
Landlord, promptly after payment of any Impositions official receipts or other
satisfactory proof evidencing payment of such Imposition. In addition Tenant
shall furnish to Landlord, semi-annually, throughout the term of this Lease, a
certificate executed by an executive officer of Tenant, stating that all
Impositions have been paid to date. Landlord shall have the right, after an
Event of Default or upon Tenant's failure to pay an Imposition, to require
Tenant to: (i) promptly deposit with Landlord funds for the payment of current
Impositions required to be paid by Tenant hereunder; and (ii) also deposit
one-twelfth (1/12th ) of the current annual or annualized Impositions as the
case may be, or those of the preceding years if the current amounts thereof have
not been fixed, on the first day of each month in advance (such deposits shall
also be required to be made by Tenant to either Landlord or Landlord's mortgage
lender, to the extent required by Landlord's mortgage lender), except that all
additional funds required for any payments thereof shall also be deposited as
aforesaid on the first day of the month during which
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or at the end of which an Imposition is due and payable without interest,
penalty or liability and any interest made available to Landlord earned on such
funds, less an administrative fee of one (1%) percent per annum, shall accrue
for the benefit of Tenant.
6. USE
(a) Tenant shall be permitted to use the Leased Premises
for any and all Lawful purposes, subject, however, to zoning ordinances, Laws,
the orders, rules and regulations of the Board of Fire Insurance Underwriters
and any similar bodies having or asserting jurisdiction, thereof now in effect
or hereafter adopted by any governmental authority having or asserting
jurisdiction and such conditions, restrictions and other encumbrances, if any,
to which the Leased Premises are subject at the time of execution and delivery
hereof.
(b) Tenant shall not use or occupy or permit the Leased
Premises to be used or occupied, nor do or permit anything to be done in or on
the Leased Premises or any part thereof, in a manner that would in any way
violate any of the Laws or any certificate of occupancy affecting the Leased
Premises or make void or voidable any insurance then in force with respect
thereto, or that may make it impossible to obtain fire or other insurance
thereon required to be furnished hereunder by Tenant, or that will cause or be
likely to cause structural injury to any of the Improvements or that will
constitute a public or private nuisance or waste. Nothing contained in this
Lease and no action or inaction by Landlord shall be deemed or construed to mean
that Landlord has granted to Tenant any right, power or permission to do any act
or to make any agreement that may create, give rise to, or be the foundation
for, any right, title, interest, lien, charge or other encumbrance upon the
estate of Landlord in the Leased Premises.
7. COMPLIANCE WITH LAWS AND AGREEMENT
(a) Tenant shall, throughout the term of this Lease, and
at Tenant's sole cost and expense, promptly comply, or cause compliance: (i)
with all Laws, whether present or future, foreseen or unforeseen, ordinary or
extraordinary, and whether or not the same shall be presently within the
contemplation of Landlord and Tenant or shall involve any change of governmental
policy, or require structural or extraordinary repairs, alterations, or
additions, and irrespective of the cost thereof, which may be applicable to the
Leased Premises, and (ii) with any agreements, contracts, easements and
restrictions affecting the Leased Premises or any part thereof or the ownership,
occupancy or use thereof existing on the date hereof or hereafter created by
Tenant, or consented to or requested by Tenant.
(b) Tenant represents and warrants that it will not on,
about or under the Leased Premises, use, make, treat or dispose of any
"hazardous substances" as that term is defined in the Comprehensive
Environmental Response, Compensation and Liability Act, and the rules and
regulations promulgated pursuant thereto, as from time to time amended, 42
U.S.C. ss. 9601 et seq.(hereinafter referred to as the "ACT") in violation of
any laws. Tenant represents and warrants that it will at all times comply with
the Act and any other federal, state or local laws, rules or regulations
governing Hazardous Materials. Hazardous Materials as used herein shall include,
without limitation, all chemicals, petroleum, crude oil or any fraction thereof,
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hydrocarbons, polychlorinated biphenyis (PCBs) , asbestos, asbestos-containing
materials and/or products, urea formaldehyde, or any substances which are
classified as "hazardous" or "toxic" under the Act; hazardous waste as defined
under the Solid Waste Disposal Act, as amended 42 U.S.C. ss. 6901; air
pollutants regulated under the Clean Air Act, as amended, 42 U.S.C. ss. 7401, et
seq.; pollutants as defined under the Clean Water Act, as amended., 33 U.S.C.
ss. 1251, et seq., any pesticide as defined by Federal Insecticide, Fungicide,
and Rodenticide Act, as amended, 7 U.S.C. ss. 136 et seq., any hazardous
chemical substance or mixture or imminently hazardous substance or mixture
regulated by the Toxic Substances Control Act, as amended, 15 U.S.C. ss. 2601,
et seq., any substance listed in the United States Department of Transportation
Table at 45 CFR 172.101; any chemicals included in regulations promulgated under
the above listed statutes or any modifications thereof or successor statutes
thereto; any explosives, radioactive material, and any chemical regulated by
state statutes similar to the federal statutes listed above and regulations
promulgated under such state statutes.
(c) To the extent required by the Act and/or any federal,
state or local laws, rules or regulations governing Hazardous Materials, Tenant
shall remove any hazardous substances (as defined in the Act) and Hazardous
Materials (as defined above) whether now or hereafter existing on the Leased
Premises arising out of or in any manner connected with Tenant's occupancy of
the Leased Premises during the term of this Lease in accordance with Applicable
Laws. Tenant shall and hereby does agree to defend, indemnify and hold Landlord
and any Mortgagee, and their respective members, officers, directors,
shareholders, partners and employees harmless from and against any and all
causes of actions, suits, demands or judgments of any nature whatsoever, losses,
damages, penalties, expenses, fees, claims, costs (including response and
remedial costs) and liabilities, including, but not limited to, attorneys' fees
and costs of litigation, arising out of or in any manner connected with (i) the
violation of any applicable federal, state or local environmental law by Tenant
with respect to the Leased Premises; (ii) the "release" or "threatened release"
of or failure to remove, as required by this subsection 7(c), "hazardous
substances" (as defined in the Act) and Hazardous Materials (as defined above)
from the Leased Premises or any portion or portions thereof, now or hereafter
existing during the term of this Lease arising out of or in any manner connected
with Tenant's occupancy of the Leased Premises during the term of this Lease.
(d) The Tenant represents and warrants that it will not
install any additional underground storage tank without specific, prior written
approval from the Landlord, which may be withheld in its sole discretion. The
Tenant will not store combustible or flammable materials on the Leased Premises
in violation of the Act and any other federal, state or local Laws, rules or
regulations governing Hazardous Materials.
(e) Except as expressly provided in subsection 12(f) of
this Lease, no abatement, diminution or reduction in Minimum Rental, additional
rent or any other charges required to be paid by Tenant pursuant hereto shall be
claimed by or allowed to Tenant for any inconvenience or interruption,
cessation, or Loss of business caused directly or indirectly, by any present or
future Laws, or by priorities, rationing or curtailment of labor or materials,
or by war, civil commotion, strikes or riots, or any manner or thing resulting
therefrom, or by any other
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cause or causes beyond the control of Landlord or Tenant, nor shall this Lease
be affected by any such causes; and, except as expressly provided in subsection
12(f) of this Lease, no diminution in the amount of the space used by Tenant
caused by legally required changes in the construction, equipment, fixtures,
motors, machinery, operation or use of the Leased Premises shall entitle Tenant
to any abatement, diminution or reduction of the rent or any other charges
required to be paid by Tenant pursuant to the terms of this Lease.
8. MAINTENANCE AND REPAIR
(a) Tenant shall promptly throughout the term of this
Lease at Tenant's cost and expense, take good care of and maintain the Leased
Premises and all roadways, sidewalks, curbs and trackage rights, if any (to the
extent the same are subject to Tenant's control) on, adjacent and appurtenant
thereto, in good order and repair, and shall promptly remove all accumulated
snow, ice and debris from any and all roadways, sidewalks, and curbs located
upon or appurtenant to the Leased Premises and from any and all other sidewalks
and curbs adjacent to the Leased Premises.
(b) Tenant shall not commit or suffer to be committed any
waste upon or about the Leased Premises, and shall promptly at its cost and
expense, make all necessary replacements, restorations, renewals and repairs to
the Leased Premises and appurtenances thereto, whether interior or exterior,
structural or non-structural, ordinary or extraordinary, and foreseen or
unforeseen ordinary wear and tear excepted. Repairs, restorations, renewals and
replacements shall, to the extent possible, be at least equivalent in quality to
the original work or the property replaced, as the case may be. Tenant shall not
make any claim or demand upon or bring any action against the Landlord for any
loss, cost, injury, damage or other expense caused by any failure or defect,
structural or non-structural of the Leased Premises or any part thereof.
(c) Landlord shall not under any circumstances be
required to build any improvements on the Leased Premises, or to make any
repairs, replacements, alterations or renewals of any nature or description to
the Leased Premises or to any of the Improvements, whether interior or exterior,
ordinary or extraordinary, structural or non-structural foreseen or unforeseen,
or to make any expenditure whatsoever in connection with this Lease or to
inspect or maintain the Leased Premises in any way. Tenant hereby waives the
right to make repairs, replacements, renewals or restorations at the expense of
Landlord pursuant to any Laws.
9. CHANGES, ALTERATIONS AND NEW CONSTRUCTION BY TENANT
(a) Tenant, at its sole cost and expense, shall have the
right at any time and from time to time during the term of this Lease to make
changes and alterations to the building or buildings on the Leased Premises or
to construct new buildings thereon or repair or replace any building or
buildings damaged, destroyed or taken (all of the foregoing are hereinafter
collectively referred to as "TENANT CHANGES" and any of the foregoing is
hereinafter referred to as a "TENANT CHANGE"), subject, however, in all cases to
the following:
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(i) Landlord's prior written consent shall be
required in each instance of any Tenant's Change involving the structure or
exterior of any building (which consent shall not be unreasonably withheld; it
shall not be unreasonable for Landlord to withhold such consent if the same
shall be in violation of any Mortgage or if any Mortgagee shall not give its
consent to the same where its consent is required by the terms of its Mortgage).
(ii) In addition to the consent required under
Section 9(a)(i) above, any Tenant Change or Tenant Changes, whether or not
structural or exterior, involving an estimated cost of more than One Hundred
Thousand ($100,000.00) Dollars shall require the prior written consent of any
Mortgagee, if and as required by such Mortgagee, and the prior written
reasonable consent of the Landlord.
(iii) No Tenant Change shall be undertaken until
the Tenant shall have procured and paid for all required permits and
authorizations of all municipal departments and governmental subdivisions having
jurisdiction; and, at Tenant's expense, the Landlord shall join in application
for such permits and authorizations whenever such action is necessary.
(iv) Any Tenant Change involving an estimated
cost of more than One Hundred Thousand ($100,000.00) Dollars shall be conducted
under the supervision of a licensed architect or engineer selected by Tenant and
shall be made in accordance with detailed plans and specifications (the "Plans
and Specifications") and cost estimates prepared by such architect or engineer
and approved in writing by the Landlord, which approval Landlord agrees not
unreasonably to withhold.
(v) Any Tenant Change shall be made promptly and
in a good workmanlike manner and in compliance with all applicable permits and
authorizations and building and zoning laws and all Laws and in accordance with
the orders, rules and regulations of the Board of Fire Insurance Underwriters
and any other body hereafter exercising similar functions having or asserting
jurisdiction over the Leased Premises.
(vi) The cost of any Tenant Change shall be paid
in cash or its equivalent by the Tenant, so that the Leased Premises shall at
all times be free of liens for labor or materials supplied or claimed to have
been supplied to the Leased Premises.
(vii) Any such Tenant Change shall immediately
upon incorporation into the Leased Premises be and become the property of the
Landlord, subject to the leasehold rights of the Tenant hereunder.
(viii) Tenant shall carry all necessary Worker's
Compensation Insurance and shall furnish Landlord with evidence of any and all
such coverage.
(ix) If any Tenant Change is undertaken by Tenant
pursuant to the provisions of Section 11 or 12 of this Lease then each request
for payment shall be made on thirty (30) days prior notice to Landlord and
Mortgagee and shall be accompanied by a certificate to be made by the
supervising architect or engineer, stating (a) that all of the work completed
has
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been done in compliance with the approved Plans and Specifications, (b) that the
sum requested is justly required to reimburse the Tenant for payments by the
Tenant to or is justly due to, the contractor, subcontractors, materialmen,
laborers, engineers, architects or other persons rendering services or materials
for the work (giving a brief description of such services and materials) , and
that, when added to all sums previously paid out by the Landlord, it does not
exceed ninety (90%) percent of the value of the work done to the date of such
certificate, with final payment of the balance of the cost of the work to be
made upon certification by the supervising architect or engineer and by the
Mortgagee's architect as to completion in accordance with the approved Plans and
Specifications, and (c) that the amount of such proceeds remaining in the hands
of the Landlord will be sufficient on completion of the work to pay for the same
in full (giving in such reasonable detail as Landlord may require an estimate of
the cost of such completion)
(x) If any Tenant Change involving an estimated
cost in excess of Thirty Thousand ($30,000.00) Dollars is undertaken by Tenant
pursuant to the provisions of Section 11 or 12 of this Lease, then the request
for any payment after the work has been completed shall be accompanied by such
certificates, permits and licenses required by any Laws and such other
instruments and agreements as Landlord or any Mortgagee shall reasonably
require;
(xi) No Tenant Change shall tie-in or connect the
Leased Premises or any Improvements thereon with any property outside the Leased
Premises without the prior written consent of the Landlord; and
(xii) No Tenant Change shall impair the structural
integrity of any building comprising a part of the Leased Premises.
(xiii) In connection with any Tenant Change
undertaken pursuant to the provisions of this Section 9 or of Section 11 or 12
of this Lease, Landlord may as a condition of its consent require Tenant to post
a bond or other security reasonably satisfactory to Landlord to insure the
completion of such Tenant Change.
(b) Notwithstanding anything to the contrary contained in
this Lease, Tenant shall not, without Landlord's prior written approval, make
any alteration or change to the Leased Premises which would decrease the size of
or decrease the square foot floor area of any building comprising a part of the
Leased Premises.
10. INDEMNITY AND PUBLIC LIABILITY INSURANCE
(a) Tenant shall at all times indemnify Landlord for,
defend Landlord against, and save Landlord harmless from, any liability, loss,
cost, injury, damage or other expense or risk whatsoever that may occur or be
claimed by or with respect to any person(s) or property on or about the Leased
Premises and resulting directly or indirectly from the use, misuse, occupancy,
possession or unoccupancy of the Leased Premises by Tenant or any
concessionaires, subtenants or other persons claiming through or under Tenant,
or their respective agents, employees, licensees, invitees, guests or other such
persons, or from the condition of the Leased Premises.
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Tenant shall, at its cost and expense, defend against any and all such actions,
claims and demands and shall indemnify Landlord for all costs, expenses and
liabilities it may incur in connection therewith. Except for the gross
negligence or willful misconduct of Landlord or Landlord's employees, agents or
contractors, Landlord shall not in any, event whatsoever be liable for any
injury or damage to the Leased Premises or to the Tenant or to any
concessionaires, subtenants or other persons claiming through or under Tenant,
or their respective agents, employees, licensees, invitees, guests or other such
persons or to any property of any such persons, and Tenant shall not make any
claim or demand upon or institute any action against the Landlord as a result of
such injury or damage.
(b) Tenant, at its cost and expense, shall obtain and
maintain in force throughout the term of this Lease, comprehensive general
liability insurance against any loss, liability or damage on, about or relating
to the Leased Premises, with limits of not less than Three Million
($3,000,000.00) Dollars for death or injuries to one person and not less than
Five Million ($5,000,000.00) Dollars for death or injuries to two or more
persons in one occurrence, and not less than One Million ($1,000,000.00) Dollars
for damage to property (all of the foregoing being hereinafter sometimes
collectively referred to as the "LIABILITY INSURANCE"). All such Liability
Insurance obtained and maintained by Tenant shall name both Landlord and Tenant
as the insured parties therein and shall be obtained and maintained from and
with a reputable and financially sound insurance company(ies) reasonably
acceptable to Landlord, authorized to issue such insurance in the State in which
the Leased Premises is located.
(c) The policies of insurance required hereunder this
Lease shall contain an agreement by the insurer that it will not cancel or
modify such policy except after thirty (30) days prior written notice to
Landlord and any Mortgagees by certified mail, return receipt requested. Not
less than thirty (30) days prior to the expiration of any such insurance policy,
Tenant shall deliver to Landlord a certificate evidencing the replacement or
renewal thereof.
(d) Tenant shall furnish Landlord with duplicate
original(s) or original certificates of such insurance policies, including
renewal and replacement policies, together with written evidence that the
premiums therefor have been paid. It is understood and agreed that said policies
may be blanket policies' covering other locations operated by Tenant, its
affiliates or subsidiaries, provided that such blanket policies otherwise comply
with the provisions of this Section 10.
(e) Tenant shall comply, notwithstanding any other
provision, with the requirements of any Mortgages relating to the insurance and
to the proceeds of insurance maintained and required to be maintained by Tenant
pursuant to the provisions of Section 10 and 11 of this Lease.
11. INSURANCE FOR DAMAGE OR DESTRUCTION AND WORKER'S COMPENSATION
(a) The Tenant shall, throughout the term of this Lease,
at its own cost and expense, obtain and maintain in full force and effect and in
the name of Tenant, Landlord and, if
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so requested by Landlord, any Mortgagees (except that Landlord and any Mortgagee
need not be named on any Workers Compensation policy):
(i) all risks insurance, including, but not
limited to collapse, loss or damage occasioned by fire, the perils included in
the so-called extended coverage endorsement, vandalism and malicious mischief,
and water damage and containing Replacement Cost, Agreed Amount and Demolition
and Increased Cost due to Ordinance endorsements covering the Improvements and
all replacements and additions thereto, and all fixtures, equipment and other
personal property therein; the foregoing coverage shall be provided in amounts
sufficient to provide one hundred (100%) percent of the full replacement cost of
the Improvements and shall be determined from time to time, but not more
frequently than once in any thirty-six (36) calendar months unless otherwise
reasonably requested by a Mortgagee, at Tenant's expense, at the request of the
Landlord, by any appraiser selected by Tenant and approved by Landlord and the
insurance carrier;
(ii) if a sprinkler system shall be located in
the Leased Premises, sprinkler leakage insurance in amounts reasonably
satisfactory to Landlord and any Mortgagees;
(iii) such other insurance and in such amounts as
may from time to time be required by a Mortgagee;
(iv) Boiler and Machinery Broad Form policy
covering explosion insurance in respect of steam and pressure boilers and
similar apparatus, if any, located on the Leased Premises in an amount equal to
one hundred (100%) percent of the full replacement cost of the Improvements;
(v) war risk insurance as and when such
insurance is obtainable from the United States Government or any agency or
instrumentality thereof, and a state of war or national or public emergency
exits or threatens, and in an amount not less than the full insurable value of
the Leased Premises;
(vi) the Liability Insurance as provided in
Section 10 of this Lease;
(vii) Worker's Compensation insurance subject to
statutory limits or better in respect of any work or other operations on or
about the Leased Premises;
(viii) such other insurance with respect to the
Leased Premises and in such amounts as Landlord from time to time may reasonably
request against such other insurable hazards which at the time in question are
commonly insured against in the case of property similar to the Leased Premises;
(ix) during the performance of any construction,
broad form Builder's All-Risk insurance.
(b) All such insurance described in subparagraph (a) of
this Section 11 shall:
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(i) be obtained from and maintained with
reputable and financially sound insurance company(ies) reasonably acceptable to
Landlord and any Mortgagees, authorized to issue such insurance in the State in
which the Leased Premises are located;
(ii) be on and/or contain such terms and
conditions as shall be satisfactory to Landlord and to any Mortgagees;
(iii) provide that the proceeds of any loss shall
be payable to Landlord (but to be held in escrow by any recognized financial
institution selected by Landlord for purposes of rebuilding in accordance with
subsection (e) below), or, if Landlord so requests, to any Mortgagees in
accordance with this Lease;
(iv) contain an agreement by the insurer that it
will not cancel or modify such policy except after thirty (30) days' prior
written notice to Landlord and any Mortgagees by certified mail, return receipt
requested; and
(v) provide that any loss otherwise payable
thereunder shall be payable notwithstanding any act or negligence of Landlord or
Tenant which might, absent such agreement, result in a forfeiture of all or part
of the payment of such loss.
(c) Not less than thirty (30) days prior to the
expiration of any such insurance policy, Tenant shall deliver to Landlord a
certificate evidencing the replacement or renewal thereof.
(d) The Tenant shall furnish Landlord and any Mortgagees
with duplicate original(s) or original certificate(s) together with true
copy(ies) of all such insurance policies described in subparagraph (a) of this
Section 11, including renewal and replacement policy(ies), together with written
evidence that the premiums therefor (hereinafter referred to as the "PREMIUMS")
have been paid. It is understood and agreed that said policies may be blanket
policies covering other locations operated by Tenant its affiliates or
subsidiaries, provided that such blanket policies otherwise comply with the
provisions of this Section 11, and provided further that such policies shall
provide for a reserved amount thereunder with respect to the Leased Premises so
as to assure that the amount of insurance required by the provisions of this
Section 11 will be available notwithstanding any losses with respect to other
property covered by such blanket policy.
(e) If any portion of the Leased Premises is damaged or
destroyed by fire or other casualty, Tenant shall forthwith give notice thereof
to Landlord and Tenant shall (to the extent insurance proceeds are made
available), at its cost and expense, forthwith repair, restore, rebuild or
replace the damaged or destroyed Improvements, fixtures or equipment, and
complete the same as soon as reasonably possible to the condition they were in
prior to such damage or destruction, except for such changes in design or
materials as may then be required by Law. The Landlord, in such event, shall, to
the extent and at the times the insurer and any Mortgagees make the proceeds of
the insurance available, reimburse the Tenant for the costs of making such
repairs, restoration, rebuilding and replacements, provided further that said
reimbursements need
11
be made only under such conditions that the Landlord and any Mortgagees are
assured that at all times `the Leased Premises shall be free of liens or claims
of liens by reason of such work, and provided further that the `portion of the
proceeds paid out at any time shall not exceed the value of the actual work and
materials incorporated in the repaired, restored, rebuilt or replaced Leased
Premises and that the conditions described in Section 9 are complied with. To
the extent, if any, that the proceeds of insurance made available as aforesaid
are insufficient to pay the entire cost of making such repairs, restoration,
rebuilding and replacements, and notwithstanding the expiration or termination
of the term of this Lease, the Tenant shall pay the amount by which such costs
exceed the insurance proceeds made available as aforesaid. Any surplus of
insurance proceeds over the cost of restoration, net of all expenses incurred by
Landlord in connection with the administration thereof, shall be promptly paid
over to the Tenant.
(f) In the event of any damage to or destruction of the
Leased Premises, Tenant shall promptly notify Landlord and any Mortgagees and
shall file prompt proof of loss to the relevant insurance company(ies).
(g) The obligation to pay the rent provided for herein
and to otherwise perform Tenant's obligations hereunder shall continue unabated
by reason of such damage or destruction; that is, there shall be no abatement or
diminution of rent or release from any of Tenant's obligations hereunder by
reason of such damage or destruction regardless of the period of time, if any,
during which the Leased Premises or any part thereof remain untenantable, any
Laws to the contrary notwithstanding.
(h) The provisions and requirements of all of Section 9
shall apply with respect to any repairing, restoring, rebuilding or replacing
made pursuant to this Section 11; and same shall be made in accordance with the
Plans and Specifications to the extent required hereunder.
(i) As to any loss or damage which may occur upon the
property of a party hereto and be collected under any insurance policy(ies),
such party hereby releases the other from any and all liability for such loss or
damage to the extent of such amounts collected.
(j) Tenant shall not take out separate insurance
concurrent in form or contributing in the event of loss with that required to be
furnished by Tenant under Sections 10 and 11 of this Lease, unless Landlord, and
with respect to the insurance described in Section 11, any Mortgagees designated
by Landlord, are included therein as named insureds, with loss payable as in
said Sections provided. Tenant shall immediately notify Landlord whenever any
such separate insurance is taken out and shall deliver to Landlord duplicate
original(s) thereof, or original certificate(s) evidencing the same with true
copies thereof, as provided in this Lease.
12. CONDEMNATION/EMINENT DOMAIN TAKING If the whole or
substantially the whole of the Leased Premises should be taken for any public or
quasi-public use under any governmental law, ordinance, or regulation, or by
right of eminent domain, or should be sold to the condemning authority in lieu
of condemnation, then this Lease shall terminate as of the date when physical
possession of the Leased Premises is taken by the condemning authority. If less
12
than the whole or substantially the whole of the Leased Premises is thus taken
or sold, Landlord (whether or not the Leased Premises are affected thereby) may
terminate this Lease by giving written notice thereof to Tenant within sixty
(60) days after the right of election accrues, in which event this Lease shall
terminate as of the date when physical possession of such portion of the Leased
Premises is taken by the condemning authority. If upon any such taking or sale
of less than the whole or substantially the whole of the Leased Premises this
Lease shall not be thus terminated, the monthly Minimum Rental payable hereunder
shall be diminished by an amount representing that part of the monthly Minimum
Rental attributable to the portion of the building which was so taken or sold or
affected, and Landlord shall, at Landlord's sole expense, restore and
reconstruct the remainder of the building, as the case may be, to substantially
their former condition to the extent that the same, in Landlord's judgment, may
be feasible; Landlord not being required in any event to spend for such work an
amount in excess of the amount received by Landlord as compensation awarded upon
a taking of any part or all of the building. Tenant shall not be entitled to any
claim as a result of such condemnation relating to the taking of its leasehold
interest, and hereby assigns over to Landlord any and all of Tenant's claim
therein or thereto.
13. REMOVAL OF TENANT'S PROPERTY/WAIVER OF LANDLORD'S LIEN
Provided the Tenant is not then in default hereunder, the Tenant shall
have the right, at any time during the term of this Lease, to remove "Tenants
Property", consisting of inventory, machinery, trade equipment, business and
trade fixtures, and other trade equipment placed, installed, supplied or made by
it in or on the Leased Premises at Tenant's cost and expense(without any
contribution or reimbursement therefor by Landlord), and which may be removed
without material injury to the Leased Premises; provided, however, that any
damage to the Leased Premises or any part thereof occasioned by such removal
shall be repaired by the Tenant at Tenant's cost and expense. As used herein and
hereafter, the term "Tenants Property" shall not include or be deemed to include
any item now or hereafter installed in or on the Leased Premises that is an
integral part of the building, including, without limiting the generality of the
foregoing, heating, ventilating, and air conditioning plants and systems,
electrical and plumbing fixtures and systems and other like equipment and
fixtures, if any. If requested by Tenant, Landlord shall waive any contractual,
statutory or other Landlord's lien on any and all of the Tenant's Property to
the lien of any third party institutional lender providing financing to Tenant
and will execute any customary agreements confirming such waiver as Tenant's
lender may reasonably request.
14. SUBORDINATION, NON-DISTURBANCE NOTICE TO MORTGAGEES
(a) This Lease, and all rights of Tenant hereunder, are
and shall be subject and subordinate in all respects to all Mortgages, which may
now or hereafter affect all or any portions of the Leased Premises, to each and
every advance made or hereafter to be made under such Mortgages, and to all
renewals, modifications, replacements and extension of such Mortgages and
spreaders and consolidations of such Mortgages, provided, that, as to any such
Mortgages that encumber the Leased Premises on the commencement date of this
Lease or that become liens
13
of record after the date of this Lease the Mortgagees thereunder shall each
enter into a non-disturbance agreement, in favor of Tenant, to provide that in
the event its said Mortgage shall be foreclosed, as the case may be, and
provided that there has not occurred an Event of Default hereunder, this Lease
shall not terminate on account thereof so long as the Tenant continues to pay
the rents reserved in this Lease and otherwise performs and observes all of the
terms, covenants, conditions and provisions of this Lease to be performed and
observed by or on behalf of Tenant thereunder. The lien of any Mortgages shall
not cover any trade fixtures or other personal property paid for and installed
in the Leased Premises by Tenant (or any persons claiming under Tenant) without
any contribution or reimbursement therefor by Landlord. The provisions of this
subsection (a) shall be self-operative and no further instrument of
subordination shall be required. In confirmation of such subordination, Tenant
shall promptly execute and deliver any instruments that Landlord, the holder of
any Mortgage, or any of its respective successors in interest, may reasonably
request to evidence such subordinations and Tenant hereby irrevocably appoints
Landlord the attorney-in-fact of Tenant to execute and deliver such instrument
on behalf of Tenant, should Tenant refuse or fail to do so promptly after
request, such power being coupled with an interest and Landlord shall promptly
send to Tenant a copy of any subordination agreement executed and delivered by
Landlord on behalf of Tenant.
(b) In the event of any act or omission of Landlord which
would give Tenant the right, immediately or after lapse of a period of time, to
cancel or terminate this Lease, or to claim a partial or total eviction, Tenant
shall not exercise such right (i) until it has given written notice of such act
or omission to each Mortgagee whose name and address shall previously have been
furnished to Tenant in writing, and (ii) unless such act or omission shall be
one which is not capable of being remedied by Landlord or any Mortgagee within a
reasonable period of time, until a reasonable period for remedying such act or
omission shall have elapsed following the giving of such notice (not to exceed
sixty (60) days) and following the time when all such Mortgagees shall have
become entitled under such Mortgages to remedy the same (which reasonable period
shall in no event be less than the period to which Landlord would be entitled
under this Lease or otherwise after similar notice, to effect such remedy),
provided any such Mortgagee shall with due diligence give Tenant written notice
of its intention to and shall commence and continue to remedy such act or
omission, but nothing herein contained shall obligate any Mortgagee to do so
unless it so elects.
(c) If a Mortgagee shall succeed to the rights of
Landlord under this Lease, whether through possession or foreclosure action or
delivery of a new lease or deed, then at the request of such party so succeeding
to Landlord's rights (herein sometimes referred to as "Successor Landlord") and
upon such Successor Landlord's written agreement to accept Tenant's attornment
which such Successor Landlord shall agree to accept if so requested by Tenant,
Tenant shall attorn to and recognize such Successor Landlord as Tenant's
landlord under this Lease, and shall promptly execute and deliver any instrument
that such Successor Landlord may reasonably request to evidence such attornment.
Tenant hereby irrevocably appoints Landlord the attorney-in-fact of Tenant to
execute and deliver such instrument on behalf of Tenant, should Tenant refuse or
fail to do so promptly after request, such power being coupled with an interest.
Upon such attornment this Lease shall continue in full force and effect as, and
as if it were, a
14
direct lease between the Successor Landlord and Tenant upon all of the terms,
covenants and conditions set forth in this Lease, and all such terms, covenants
and conditions shall be applicable after such attornment except that the
Successor Landlord shall:
(i) not be liable for any previous act or
omission of Landlord under this Lease, provided that the Successor Landlord
shall be liable for any continuing defaults which remain uncured as of the date
of Successor Landlord obtains title to the Leased Premises that are the
responsibility or obligation of the Landlord hereunder to cure;
(ii) not be subject to any offset, not expressly
provided for in this Lease, which shall have theretofore accrued or which may
thereafter accrue to Tenant against Landlord; and
(iii) not be bound by any previous modification of
this Lease, not expressly provided for in this Lease, other than a modification
of this Lease executed by Landlord and Tenant prior to the execution of any
Mortgage, or by any previous prepayment of more than one month's Minimum Rental,
unless such modification or prepayment shall have been expressly approved in
writing by the Mortgagee(s) through or by reason of which the Successor Landlord
shall have succeeded to the rights of Landlord under this Lease.
15. NON-WAIVER Neither a failure by the Landlord to exercise any
of its options hereunder, nor failure to enforce its rights or seek its remedies
upon any default, nor the acceptance by the Landlord of any rent accruing before
or after any default, shall effect or constitute a waiver of the Landlord's
right to exercise such option, to enforce such right, or to seek such remedy
with respect to that default or to any prior or subsequent default. The remedies
provided in this Lease shall be cumulative and shall not in any way abridge,
modify or preclude any other rights or remedies to which the Landlord may be
entitled either at law or in equity.
16. QUIET ENJOYMENT If the Tenant pays the rent it is obligated
hereunder to pay, and observes all other terms, covenants and conditions hereof,
it may peaceably and quietly have, hold and enjoy the Leased Premises during the
term of this Lease, subject, however, to all the terms of this Lease. No failure
by Landlord to comply with the foregoing covenant shall give Tenant any right to
cancel or terminate this Lease or to xxxxx, reduce or make any deduction from or
offset against any rent or any other sum payable under this Lease, or to fail to
perform any other obligations of Tenant hereunder.
17. ASSIGNMENT AND SUBLETTING
(a) Tenant shall not sublet the Leased Premises, nor any
part thereof, nor assign, or otherwise dispose of this Lease or any interest
therein, or any part thereof, without Landlord's prior written consent in each
of the foregoing cases, which consent, however, to an assignment of this Lease
may be withheld or granted in Landlord's sole discretion, or a subletting of the
Leased Premises shall not be unreasonably withheld, provided the following
conditions are complied with:
15
(i) Any assignment shall transfer to the
assignee all of the Tenant's rights in, and interests under, this Lease.
(ii) At the time of any assignment and/or
subletting this Lease must be in full force and effect without any breach or
default thereunder on the part of the Tenant.
(iii) Any assignee shall assume, by written,
recordable instrument, in form and content satisfactory to Landlord, the due
performance of all of Tenant's obligations under this Lease including any
accrued obligations at the time of the assignment. A copy of the assignment and
assumption agreement, both in form and content satisfactory to Landlord, fully
executed and acknowledged by the assignee, together with a certified copy of a
properly executed corporate resolution (if the assignee be a corporation)
authorizing such assumption agreement, shall be sent to Landlord within ten (10)
days from the effective date of such assignment.
(iv) A copy of any sublease fully executed and
acknowledged by the Tenant and the sublessee, shall be mailed to Landlord within
ten (10) days from effective date of such subletting.
(v) Such assignment and/or subletting shall be
subject to all the provisions, terms, covenants and conditions of this Lease and
the Tenant/assignor (and any guarantor(s) of this Lease) and such assignee(s)
shall continue to be and remain liable hereunder, it being expressly understood
and agreed that no assignment or subletting of the Leased Premises shall, in any
way, relieve Tenant or any subsequent assignee(s) from the performance of any of
the agreements, terms, covenants and conditions of this Lease.
(vi) Each sublease permitted under this Section
shall contain provisions to the effect that (A) such sublease is only for the
actual use and occupancy by the sublessee and (B) such sublease is subject and
subordinate to all of the terms, covenants and conditions of this Lease and to
all of the rights of Landlord thereunder, and (C) in the event this Lease shall
terminate before the expiration of such sublease, the subtenant thereunder will,
at Landlords option, attorn to Landlord and waive any rights the subtenant may
have to terminate the sublease or to surrender possession thereunder, as a
result of the termination of this Lease.
(b) Notwithstanding anything contained in this Lease to
the contrary and notwithstanding any consent by Landlord to any assignment of
this Lease no assignee shall further assign its interest in this Lease nor
sublease the Leased Premises, or any portion thereof, except in accordance with
the provisions of this Section 17.
(c) Notwithstanding anything contained in this Lease to
the contrary, should Tenant desire to assign this Lease or sublet more than
fifty (50%) percent of the net rental square footage of the main building or any
other portion of the Leased Premises, it shall give written notice of its
intention to do so to Landlord sixty (60) days or more before the effective date
of such proposed subletting or assignment and Landlord may, at any time within
thirty (30) days after the receipt of such notice from Tenant, cancel this Lease
by giving Tenant written notice of its intention to do so, in which event such
cancellation shall become effective upon the date
16
specified by Landlord, but not less than thirty (30) days nor more than ninety
(90) days after its receipt by Tenant, with the same force and effect as if said
cancellation date were the date originally set forth as the expiration date of
the term of this Lease. Landlord may enter into a direct lease with the proposed
subtenant or assignee or with any other persons as Landlord may desire.
(d) Tenant's failure to comply with all of the provisions
and conditions of this Section 17 and all of the subsections hereof shall
(whether or not Landlord's consent is required under this Section), at
Landlord's option, render any purported assignment or subletting null and void
and of no force and effect.
(e) In the event that Tenant hereunder or any
"Guarantors" (hereinafter defined) shall, at any time, be a corporation, no
change shall occur in the majority ownership of and/or the power to vote the
majority of the outstanding capital stock of Tenant (or such Guarantors) without
the prior written consent of Landlord, unless Tenant or such guarantor is a
publicly traded company on a nationally recognized stock exchange.
(f) The Tenant may, without the consent of Landlord,
consolidate with or merge into any other corporation, convey or transfer all or
substantially all of its assets to any other corporation, or permit any other
corporation to consolidate with or merge into it upon condition that:
(i) The corporation which results from such
consolidation or merger or the transferee to which such sale shall have been
made (hereinafter referred to as the "SURVIVING CORPORATION") is a corporation
organized under the laws of any State of the United States, and the Surviving
Corporation shall have a net worth, computed in accordance with generally
accepted accounting principles, consistently applied at least equal to the net
worth of Tenant on the day immediately preceding such consolidation, merger or
transfer; and
(ii) the Surviving Corporation shall expressly
and unconditionally assume by written agreement in recordable form to perform
all such obligations of the Tenant hereunder and shall be obligated to perform
all such obligations of the Tenant hereunder to the same extent as if the
Surviving Corporation had originally executed and delivered this Lease; and
(iii) no rights of Landlord under this Lease shall
be affected or reduced by such consolidation, merger, conveyance or transfer.
Tenant covenants that it will not merge or consolidate or sell or otherwise
dispose of all or substantially all of its assets unless there shall be
compliance with all of the foregoing provisions of subsection 17(f) of this
Lease and unless the instrument referred to in subparagraph 17(f) (ii) above
shall have been delivered to Landlord.
17
18. ENTRY BY LANDLORD Landlord and any Mortgagee(s), and their
respective duly authorized representatives shall have the right to enter the
Leased Premises at all reasonable times and upon 48 hours prior notice for the
purposes of:
(a) inspecting the conditions of same, and making such
repairs, alterations, additions, or improvements thereto as may be necessary or
desirable if Tenant fails to do so as required hereunder (but the Landlord shall
have no duty whatsoever to make any such inspections, repairs, alterations,
additions, or improvements); and
(b) exhibiting the same to persons who may wish to
purchase or lease the same, and, during the last year of the term of this Lease,
placing a notice of reasonable size on the Leased Premises offering the same or
any part thereof for sale or for rent.
19. TENANT'S DEFAULT The following shall be defined and deemed as
an "Event of Default": (a) if Tenant shall default in the payment of the Minimum
Rental or any additional rent and if Tenant shall fail to cure said default
within five (5) business days after receipt from Landlord of a written notice of
such default, or, (b) if Tenant shall default in the performance or observance
of any term, obligation, covenant or condition to be performed or observed by
Tenant under this Section 19 or under any of Section 17 of this Lease; or (c) if
Tenant shall default in the performance or observance of any other term,
obligation, covenant or condition to be performed or observed by Tenant under
this Lease and if Tenant shall fail to cure said default within twenty-five (25)
days after receipt of notice of said default from Landlord, or if said default
shall reasonably require longer than twenty-five (25) days to cure, if Tenant
shall fail to commence to cure said default within twenty-five (25) days after
receipt of notice thereof and continuously prosecute the curing of the same to
completion with due diligence, or (d) if Tenant shall make an assignment of its
property for the benefit of creditors or shall institute any proceedings
relating to it or its property under any bankruptcy or insolvency laws of any
jurisdiction or shall petition to any court for, or consent to, the appointment
of a receiver, trustee or assignee of it or any part of its property, or (e) if
an order for relief under any provisions of Title 11 of the United States
Bankruptcy Code and any amendments thereto (hereinafter referred to as the
"BANKRUPTCY CODE") shall be entered against tenant, or (f) if Tenant shall be
declared bankrupt or insolvent according to law, or (g) if any bankruptcy or
insolvency proceedings shall be commenced against Tenant and shall not be
dismissed within sixty (60) days thereafter or (h) if a receiver, trustee, or
assignee shall be appointed without the consent of Tenant in any bankruptcy or
insolvency proceedings of Tenant or the property of Tenant and shall not be
discharged within ninety (90) days thereafter, or (i) if Tenant shall be
Liquidated or dissolved, or shall begin proceedings toward its liquidation or
dissolution, or shall, in any manner, permit the divestiture of substantially
all of its assets, or (j) if, as a result of any failure by Tenant to perform or
observe any of the terms, obligations, covenants or conditions to be performed
or observed by it under this Lease, a breach or default shall have occurred and
be continuing under any Mortgage. The word "Tenant" as used in subsections (d),
(e), (f), (g), (h), (i) and (j) of this Section 19 shall mean the then holder of
the Tenant's interest in this Lease hereunder and/or any Guarantor and/or other
persons who or which are liable for Tenant's obligations under this Lease. The
words "Landlord" and "Tenant" as used in subsections (b) and (c) of this Section
19 shall
18
mean any person, firm or entity controlled by, under common control with, or
controlling the Landlord or the "Tenant" (as defined in the preceding sentence
under this Lease, respectively); and for the purpose of interpreting this
sentence the word "control shall be deemed to mean capable of directing the
business activities and direction of such person, firm or entity. Any defaults
in Tenant's liabilities or obligations under this Lease occasioned by any acts
or failures to act by any persons having or claiming any right, title and
interest in or to the Leased Premises by, through or under Tenant, shall be
deemed the default of Tenant hereunder. If this Lease is terminated pursuant to
this Section 19, Tenant waives (i) the benefit of any Laws exempting property
from liability for rent or for debt, and (ii) the service of any notice which
may be required by any Laws.
In case of the occurrence of any Event of Default hereinbefore provided,
the Landlord shall have the immediate right of reentry and may remove all
persons and property from the Leased Premises by summary proceedings, force or
otherwise. In addition to all other remedies afforded by law and/or equity, in
the event of the occurrence of any Event of Default (whether or not Landlord
shall elect to reenter or to take possession pursuant to legal proceedings or
pursuant to any notice provided for by Laws), Landlord shall have the right, at
its option, to (i) declare the balance of the entire rent for the entire rental
term of this Lease to be immediately due and payable (in which event Landlord
may then proceed to collect all of the unpaid rent called for by this Lease by
distress or otherwise) which rental shall be discounted to its present value, or
(ii) terminate this Lease on not less than two (2) days notice to Tenant and
upon the giving of said notice, this Lease and the term hereof shall cease and
expire on the date set forth is said notice as if said date were the expiration
date originally set forth herein and/or it may from time to time, whether or not
this Lease be terminated, make such alterations and repairs as may be reasonably
necessary in order to relet the Leased Premises or any part(s) thereof for such
term or terms (which may extend beyond the term of this Lease) and at such
rental(s) and upon such other terms and conditions as Landlord in its sole
discretion may deem advisable; upon each such reletting all rentals received by
the Landlord from such reletting shall be applied, first, to the payment of any
indebtedness (other than rents due hereunder) of Tenant to Landlord, second, to
the payment of any costs and expenses of such reletting, including, without
limitation, brokerage fees (at no greater than customary rates in the area in
which the Leased Premises is located) and reasonable attorneys' fees and of the
cost of such alterations and repairs, third, to the payment of rents due and
unpaid hereunder; and the residue, if any, shall be held by Landlord and applied
in payment of future rents and other payments required to be made by Tenant
hereunder as the same may become due and payable hereunder, with the right
reserved to Landlord to bring such action(s) or proceeding(s) for the recovery
of any deficits remaining unpaid without being obliged to await the end of the
term for a final determination of Tenant's account; and the commencement or
maintenance of any one or more actions shall not bar Landlord from bringing
other or subsequent actions for further accruals pursuant to the provisions of
this Section. If such rentals received from such reletting during any month be
less than that to be paid during that month by Tenant hereunder, Tenant shall
pay any such deficiency to Landlord. Such deficiency shall be calculated and
paid monthly subject to Landlord's right of action(s) or proceeding(s) , as
aforesaid. No such reentry or taking possession of the Leased Premises by
Landlord shall be construed as an election on its part to terminate this Lease
unless a written notice of such
19
intention be given to Tenant or unless the termination, thereof be decreed by a
court of competent jurisdiction. Notwithstanding any such reletting without
termination, Landlord may at any time thereafter elect to terminate this Lease
for such previous breach. Should Landlord at any time terminate this Lease for
any breach, in addition to any other remedies it may have, it may recover from
Tenant all damages it may incur by reason of such breach as damages for loss of
the bargain and not as a penalty, including the cost of recovering the Leased
Premises, reasonable attorneys' fees, and including the worth, at the time of
such termination of the excess, if any, of the amount of rental and charges
equivalent to the rental and charges reserved in this Lease for the remainder of
the then term of this Lease, over the aggregate rental value of the Leased
Premises for the remainder of such term, all of which shall be immediately due
and payable from Tenant to Landlord. If any Laws shall validly limit the amount
of the damages provided for in the immediately preceding sentence to less than
the amount above agreed upon, Landlord shall be entitled to the maximum amount
allowable under such Laws. In the event the Tenant does not comply with its
obligations under this Lease, Landlord shall also have the right to appropriate
injunctive relief. The rights and remedies whether herein or anywhere else in
this Lease provided shall be cumulative and the exercise of any one right or
remedy shall not preclude the exercise of or act as a waiver of any other right
or remedy of Landlord hereunder or which may be existing at law, or in equity or
by statute or otherwise. In addition to the foregoing, Tenant, and its
successors and assigns, shall at all times indemnify Landlord for, defend
Landlord against and save Landlord harmless from any liability, loss, cost,
injury, damage or other expense or risk whatsoever directly or indirectly,
arising out of, resulting from or otherwise in connection with the failure for
any reason on the part of Tenant to perform, observe or comply with any of the
covenants, conditions and obligations under this Lease to be performed, observed
or complied with by Tenant.
20. TAX APPEALS AND CONTESTS
(a) Tenant shall have the right, at its cost and expense,
to contest the amount or validity, in whole or in part, of any Imposition of any
kind by appropriate proceedings diligently conducted in good faith, but no such
contest shall be carried on or maintained by Tenant after the time limit for the
payment of any Imposition unless the Tenant, at its option: (i) shall pay the
amount involved under protest; or (ii) shall procure and maintain a stay of all
proceedings to enforce any collection of any imposition together with all
penalties, interest, costs and expenses by a deposit of a sufficient sum of
money, or by such undertaking, as may be required or permitted by law to
accomplish such stay; or (iii) shall deposit with Landlord or any Mortgagee, as
security for the performance by the Tenant of its obligations hereunder with
respect to such Imposition such security in amounts equal to such contested
amount or such reasonable security as may be demanded by the Landlord or any
Mortgagee to insure payment of such contested Imposition and all penalties,
interest, costs and expenses which may accrue during the period of the contest.
Upon the termination of any such proceedings, it shall be the obligation of
Tenant to pay the amount of such Imposition or part thereof, as finally
determined in such proceeding the payment of which may have been deferred during
the prosecution of such proceedings together with any costs, fees (including
counsel fees), interest, penalties or other liabilities in connection therewith,
whereupon the Landlord shall arrange to have returned to the
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Tenant, with any interest (less an administrative fee of one (1%) percent per
annum) earned thereon, all amounts, if any, held by or on behalf of Landlord
which were deposited by the Tenant in accordance with the provisions hereof.
(b) Tenant shall have the right, at its cost and expense,
to seek a reduction in the valuation of the Leased Premises as assessed for tax
purposes and to prosecute any action or proceeding in connection therewith.
Provided Tenant is not in default hereunder, Tenant shall be authorized to
collect any tax refund of any tax paid by Tenant obtained by reason thereof and
to retain the same.
(c) Landlord agrees that whenever Landlord's cooperation
is required in any of the proceedings brought by Tenant as aforesaid, Landlord
will reasonably cooperate therein, provided same shall not entail any cost,
liability or expense to Landlord and Tenant will pay, indemnify and save
Landlord harmless of and from, any and all liabilities, losses, judgments,
decrees, costs and expenses (including all reasonable attorneys' fees and
expenses) in connection with any such contest and will, promptly after the final
settlement fully pay and discharge the amounts which shall be levied, assessed,
charged or imposed or be determined to be payable therein or in connection
therewith and Tenant shall perform and observe all acts and obligations the
performance of which shall be ordered or decreed as a result thereof. No such
contest shall subject Landlord or any Mortgagee to the risk of any material
civil liability or the risk of any criminal liability, and Tenant shall give
such reasonable indemnity or security to Landlord, any Mortgagee as may
reasonably be demanded by any of them to insure compliance with the foregoing
provisions of this Section 20.
21. SIGNS Tenant may, during the term of this Lease, upon
obtaining any and all necessary permits from governmental authorities paint or
erect and maintain, at its cost and expense, signs of such dimensions and
materials as it may reasonably deem appropriate in or about the Leased Premises.
Such signs shall be removed by Tenant upon the termination of its occupancy of
the Leased Premises.
22. SURRENDER OF PREMISES Except in the case of condemnation
described in subsection 12(a), at the expiration or sooner termination of the
term of this Lease, Tenant shall surrender the Leased Premises in the same
condition as the Leased Premises were in upon delivery of possession thereto
under this Lease, reasonable wear and tear excepted, and shall surrender all
keys for the Leased Premises to Landlord at the place then fixed for the payment
of rent and shall inform Landlord of all combinations on locks, safes and
vaults, if any, in the Leased Premises. Tenant shall at such time remove all
Tenant's Property, as well as any alterations or improvements, if requested to
do so by Landlord and shall repair any damage to the Leased Premises caused
thereby, and any or all of such properly not so removed shall, at Landlord's
option, become the exclusive property of Landlord or be disposed of by Landlord,
at Tenant's cost and expense, without further notice to or demand upon Tenant.
Tenant agrees that if Tenant does not surrender the Lease Premises to Landlord
at the end term of this Lease, then Tenant will pay to Landlord, to the extent
permitted by law, one hundred fifty percent (150%) of the amount of the rent
paid by Tenant for the last full month of the term for each month or
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portion thereof that Tenant holds over, unless such holdover is expressly
permitted in advance by Landlord in writing. Furthermore, at all times, Tenant
shall indemnify Landlord against loss or liability resulting from the delay by
Tenant in so surrendering the Leased Premises including, without limitation, any
claims made by any succeeding occupant founded on such delay. Tenant's
obligation to observe or perform this covenant shall survive the expiration or
other termination of the term of this Lease.
No receipt of money by Landlord from Tenant after termination of this
Lease or the service of any notice of commencement of any suit or final judgment
for possession shall reinstate, continue or extend the term of this Lease or
affect any such Notice, demand, suit or judgment.
23. Intentionally Omitted.
24. LANDLORD DEFINED
(a) The term "Landlord" as used in this Lease means only
the owner of the Leased Premises, or the Mortgagee in possession of the Leased
Premises, for the time being, so that in the event of any sale or other transfer
of the Leased Premises, Landlord shall be and hereby is entirely freed and
relieved of all liabilities and obligations of Landlord hereunder arising from
and after the date of any such transfer, and it shall be deemed without further
agreement between the parties and any successor of Landlord, that such successor
has assumed and agreed to perform and observe all liabilities and obligations of
Landlord hereunder.
(b) Notwithstanding anything contained herein to the
contrary, it is specifically understood and agreed that there shall be no
personal liability on Landlord in respect of any of the terms, covenants,
conditions or provisions of this Lease, and in the event of a breach or default
by Landlord of any of its liabilities and obligations under this Lease, Tenant
and any persons claiming by, through or under Tenant shall look solely to the
equity of the Landlord in the Leased Premises for the satisfaction of Tenant's
and such persons' remedies and claims for damages.
25. TENANT'S PAYMENTS Each and every payment and expenditure,
other than Minimum Rental and other than costs for any additions, alterations,
repairs, replacements and improvements to the Improvements, which are required
to be paid by Tenant under this Lease shall be deemed to be additional rent
hereunder, whether or not the provisions requiring payment of such amounts
specifically so state, and shall be payable, unless otherwise provided in this
Lease, on demand by Landlord and in the case of the non-payment of any such
amount, Landlord shall have, in addition to all of its other rights and
remedies, all of the rights and remedies available to Landlord hereunder or by
Laws in the case of nonpayment of Minimum Rental. Unless expressly otherwise
provided in this Lease, the performance and observance by Tenant of all the
terms, covenants and conditions of this Lease to be performed and observed by
Tenant hereunder shall be performed and observed by Tenant at Tenant's sole cost
and expense. Tenant agrees to pay or reimburse Landlord, on demand, for any
reasonable costs and expenses that may be incurred by Landlord in connection
with its review of any instruments or documents requested
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by Tenant pursuant to this Lease or relating to the Leased Premises including
but not limited to the costs and expenses of making such investigations as the
Landlord shall deem appropriate and the reasonable legal fees and disbursements
of Landlord's counsel. All payments of Minimum Rental hereunder shall be made to
Landlord by check, as Landlord may direct, at the address set forth in the
beginning hereof unless otherwise provided herein or at such other address as
may be designated by Landlord.
26. RIGHT TO CURE DEFAULT If Tenant shall fail to fully comply
with any of its liabilities or obligations under this Lease (including, without
limitation, its obligations to make repairs, maintain various policies of
insurance, comply with all Laws and pay all Impositions and bills for
utilities), then ten (10) days after the giving of written notice of such breach
to Tenant (except that prior written notice shall not be required in the event
of an emergency) Landlord shall have the right, at its option, to cure such
breach at Tenant's cost and expense. Tenant agrees to reimburse Landlord (as
additional rent) for all losses, costs, damages and expenses resulting therefrom
or incurred in connection therewith, together with interest thereon (at a rate
equal to the "Maximum Rate"), promptly upon demand.
27. COVENANT AGAINST LIENS
(a) If, because of any act or omission (or alleged act or
omission) of Tenant, any mechanic's or other lien, charge or order for the
payment of money or other encumbrances shall be filed or imposed against
Landlord, any Mortgagee and/or any portion of the Leased Premises (whether or
not such lien, charge, order or encumbrance is valid or enforceable as such),
Tenant shall, at its cost and expense, cause same to be discharged of record or
bonded within ten (10) days after notice to Tenant of the filing or imposition
thereof; and Tenant shall indemnify and defend Landlord against and save
Landlord harmless from all losses, costs, damages, expenses, liabilities, suits,
penalties, claims, demands and obligations, including, without limitation,
reasonable counsel fees, resulting therefrom. If Tenant fails to comply with the
foregoing provisions, Landlord shall have the option of discharging or bonding
any such lien, charge, order or encumbrance, and Tenant agrees to reimburse
Landlord (as additional rent) for all losses, costs, damages, and expenses
resulting therefrom or incurred in connection therewith, together with interest
thereon (at a rate equal to the "Maximum Rate"), promptly upon demand.
(b) All materialmen, contractors, artisans, mechanics,
laborers and any other persons now or hereafter furnishing any labor, services,
materials supplies or equipment to Tenant with respect to any portion of the
Leased Premises, are hereby charged with notice that they must look exclusively
to Tenant to obtain payment for same. Notice is hereby given that the Landlord
shall not be liable for any labor, services, materials, supplies or equipment
furnished or to be furnished to the Tenant upon credit, and that no mechanic's
or other lien for any such labor, services, materials, supplies or equipment
shall attach to or affect the estate or interest of the Landlord in and to the
Leased Premises.
(c) Tenant shall not mortgage or pledge it interest in
this Lease or otherwise mortgage or pledge the interest of Tenant in and to any
sublease of the Leased Premises or any portion thereof or the rental payable
thereunder, except that a leasehold mortgage may be given
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by Tenant in favor of Citicorp USA, Inc., as Agent, or to any successor lender
providing an asset based loan facility to Tenant,provided (i) any such leasehold
mortgage specifically shall state that it is subordinate to any mortgagee of
Landlord, and (ii) that no additional notice and/or cure rights are requested of
Landlord with respect to same. Any such mortgage or pledge not permitted by this
Section 27(c) shall be void.
28. Intentionally Omitted.
29. LANDLORD'S AND TENANT'S CERTIFICATE Landlord and Tenant shall,
each without charge at any time and from time to time, within ten (10) days
after request by the other party, certify by written instrument, duly executed,
acknowledged and delivered to any ground lessor, Mortgagee, assignee of any
Mortgagee or purchaser, or any proposed Mortgagee, or proposed assignee or
sub-tenant of Tenant or any other person, firm or corporation specified by
Landlord or Tenant:
(a) That this Lease and all "Guarantees" (hereinafter
defined) are unmodified and in full force and effect (or, if there has been
modification, that the same is in full force and effect as modified and stating
the modifications);
(b) Whether or not there are then existing any breaches
or defaults by the other party under any of the terms of this Lease and
specifying such breach or default or any setoffs or defenses against the
enforcement of any of the agreements, terms, covenants or conditions of this
Lease or of any Guarantees upon the part of the Landlord or Tenant or any said
Guarantor, as the case may be, to be performed or complied with (and, if so,
specifying the same and the steps being taken to remedy the same) ; and
(c) The dates, if any, to which the rental(s) and other
charges under this Lease have been paid in advance.
Tenant shall cause any and all of its said certifications which refer to
any Guarantors or Guarantees to be executed and acknowledged by the relevant
Guarantors.
30. WAIVER OF TRIAL BY JURY AND WAIVERS BY GUARANTORS Landlord and
Tenant do hereby waive trial by jury in any action, proceeding or counterclaim
brought by either against the other, upon any matters whatsoever arising out of
or in any way connected with this Lease, Tenant's use or occupancy of the Leased
Premises, and/or any claim of injury or damage. It is further mutually agreed
that in the event Landlord commences any summary proceeding for non-payment of
Minimum Rental or additional rent, Tenant will not interpose any counterclaim of
whatever nature or description in any such proceeding unless required by law to
raise such counterclaim in such action. Each and every Guarantor, if any, shall
with respect; to the liabilities and obligations under its Guarantee, be deemed
to have agreed to waive, with respect to its Guarantee and this Lease, all
rights which are waived by Tenant under this Lease.
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31. NET LEASE NON-TERMINABILITY This is an absolutely "Bond Type"
net lease to the Landlord. It is the intent of the parties hereto that the
Minimum Rental payable under this Lease shall be an absolutely net return to the
Landlord and that the Tenant shall pay all costs and expense relating to the
Premises, unless otherwise expressly provided in this Lease. Any amount or
obligation herein relating to the Premises which is not expressly declared to be
that of the Landlord shall be deemed to be an obligation of the Tenant to be
timely performed by the Tenant at the Tenant's expense. Except as otherwise
specifically provided in Section 12 hereof, this Lease shall not terminate nor
shall Tenant have any right to terminate this Lease; nor shall Tenant be
entitled to any abatement, deduction, deferment, suspension or reduction of, or
setoff, defense or counterclaim against, any rentals, charges, or other sums
payable by Tenant under this Lease; nor shall the respective obligations of
Landlord and Tenant be otherwise affected by reason of damage to or destruction
of the Leased Premises from whatever cause, any taking by condemnation, eminent
domain, requisition or by agreement between Landlord and those authorized to
exercise such rights, the lawful or unlawful, limitation of Tenant's use of the
Leased Premises, the interference with such use by any persons, corporations or
other entities or by reason of any eviction by paramount title, or by reason of
Tenant's acquisition of ownership of any or all of the Leased Premises otherwise
than pursuant to an express provision of this Lease, or by reason of any default
or breach of any warranty by Landlord under this Lease or any other agreement
between Landlord and Tenant, or to which Landlord and Tenant are parties, or for
the failure of Landlord to deliver possession of the Premises on the
commencement of the term hereof, or for any other cause whether similar or
dissimilar to the foregoing any present or future Laws to the contrary
notwithstanding; it being the intention that the obligations of Landlord and
Tenant hereunder shall be separate and independent covenants and agreements and
that the Minimum Rental, additional rent and all other charges and sums payable
by Tenant hereunder shall continue to be payable in all events unless the
obligations to pay the same shall be terminated pursuant to the express
provisions of this Lease; and Tenant covenants and agrees that it will remain
obligated under this Lease in accordance with its terms, and that it will not
take any action to terminate, cancel, rescind or void this Lease,
notwithstanding the bankruptcy, insolvency, reorganization, composition,
readjustment, liquidation, dissolution, winding up or other proceedings
affecting Landlord or any assignee of, or successor to, Landlord, and
notwithstanding any action with respect to this Lease that may be taken by a
trustee or receiver of Landlord or any assignee of, or successor to, Landlord or
by any court in any such proceeding. Except specifically as provided in this
Lease, Tenant waives all rights which may now or hereafter be conferred by law
(i) to quit, terminate, or surrender this Lease or the Premises or any part
thereof, or (ii) to any abatement, suspension, deferment or reduction of the
Minimum Rental, Additional Rent, or any other sums payable under this Lease.
Notwithstanding anything to the contrary contained above, the Tenant does retain
a separate and independent right to xxx the Landlord, provided, however, any
judgment in favor of the Tenant shall not xxxxx Minimum Rental or Additional
Rent or terminate the Tenant's obligations hereunder.
32. MISCELLANEOUS PROVISIONS
(a) NOTICES. Any notice, exercise of option or election,
communication, request or other document or demand required or permitted under
this Lease shall, be in writing
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and shall be given to Landlord or Tenant by Federal Express or other similar
national, reputable, overnight courier which provides proof of delivery,
registered or certified mail, return receipt requested, postage prepaid, to the
parties at the addresses indicated below:
(i) If to Landlord, as follows:
LJH, Ltd.
c/o Xx. Xxx Xxxx
X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000
And Copy to:
Xxxxx & Xxxxxx
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
(ii) To Tenant as follows:
Aircraft Interior Design, Inc.
c/o TIMCO Aviation Services, Inc.
000 Xxxxx Xxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xx. Xxxx Xxxxxx
And Copy to:
Akerman, Senterfitt & Xxxxxx, P.A.
Suntrust International Center
Xxx X.X. Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxx, Xx. 00000-0000
Attn: Xxxxxx Xxxxxxx, Esq.
Either party may, from to time, change the address at which such written
notices, exercise of options or election, communications requests, or other
documents or demands are to be mailed, by giving the other party(ies) written
notice of such changed address, pursuant to the terms hereinabove set forth. At
Landlord's option, which may be executed at any time hereafter, Tenant shall
send copies of any and all said notices and other communications designated by
Landlord to any Mortgagees designated by Landlord, in the same manner as notices
are required to be sent to Landlord, and at such address(es) as Landlord may
from time to time designate by notice to Tenant.
(b) RELATIONSHIP OF THE PARTIES. It is the intention of
the parties hereto to create the relationship of Landlord and Tenant, and no
other relationship whatsoever,
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and unless expressly otherwise provided herein, nothing herein shall be
construed to make the parties hereto liable for any of the debts, liabilities or
obligations of the other party.
(c) GOVERNING LAWS. This Lease shall be governed
exclusively by the provisions hereof and by the laws of the State in which the
Leased Premises is located as the same may from time to time exist.
(d) INVALIDITY OF PARTICULAR PROVISIONS. If any term or
provision of this Lease or the application thereof to any person or circumstance
shall, to any extent, be invalid or unenforceable, the remainder of this Lease,
or the application of such term or provision to persons or circumstances other
than those as to which it is held invalid or unenforceable, shall not be
affected thereby and each term and provision of this Lease shall be valid and be
enforced to the fullest extent permitted by law.
(e) WAIVER. Failure on the part of either party to
complain of any action or non-action on the part of the other party, no matter
how long the same may continue, shall never be deemed to be a waiver by either
party of any of its rights hereunder. Acceptance by Landlord of Minimum Rental,
additional rent or any other charges paid by Tenant hereunder shall not be or be
deemed to be a waiver by Landlord of any default by Tenant, whether or not
Landlord knows of such default. No waiver at any time of any of the provisions
hereof by either party shall be construed as a waiver of any of the other
provisions hereunder and a waiver at any time of any of the provisions hereof
shall not be construed as a waiver at any subsequent time of the same
provisions.
(f) COUNTERPARTS. This Lease may be executed, in several
counterparts, each of which shall be deemed an original, and such counterparts
shall constitute but one and the same instrument.
(g) SOLE AGREEMENT. This Lease sets forth all the
promises, inducements, agreements, conditions and understandings between
Landlord and Tenant relative to the Leased Premises, and there are no promises,
agreements, conditions or understandings, either oral or written, express or
implied between them, other than as herein set forth. Except as herein otherwise
provided, no subsequent alteration, amendment, change or addition to this Lease
shall be binding upon Landlord or Tenant, unless reduced to writing and signed
by the party(ies) to be charged therewith
(h) SHORT FORM OF LEASE. A short form or memorandum of
Lease for recording purposes only, in form reasonably satisfactory to the
Landlord's and Tenant's respective counsel, shall, simultaneously with the
execution hereof, be executed by Landlord and Tenant.
(i) CAPTIONS. The captions of the several Sections and
subsections of this Lease and table of contents are not a part of the context
hereof and shall be ignored in construing this Lease. They are intended only as
aids in locating various provisions hereof.
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(j) SUCCESSORS AND ASSIGNS. Except as may be expressly
otherwise provided herein, the terms, covenants and conditions hereof shall
inure to the benefit of and shall be binding upon Landlord and its successors
and assigns and the terms, covenants and conditions hereof shall inure to the
benefit of and shall be binding upon Tenant and its successors and permitted
assigns.
(k) NO MERGER. There shall be no merger of this Lease, or
the leasehold estate created by this Lease, with any other estate or interest in
the Leased Premises, or any part thereof, by reason of the fact that the same
person, firm, corporation or other entity may acquire or own or hold, directly
or indirectly, (i) this Lease or the leasehold estate created by this Lease, or
any interest in this Lease or in any such leasehold estate, and (ii) any such
other estate or interest in the Leased Premises or any part thereof; and no such
merger shall occur unless and until all persons, corporations, firms and other
entities having an interest (including a security interest) in (i) this Lease or
the leasehold estate created by this Lease; and (ii) any such other estate or
interest in the Leased Premises, or any part thereof, shall join in a written
instrument effecting such merger and shall duly record the same.
(l) GUARANTY IS MATERIAL INDUCEMENT TO LANDLORD. As a
material inducement to Landlord to enter into this Lease with Tenant, Tenant has
procured from TIMCO Aviation Services, Inc., a Delaware corporation
("Guarantor(s)"), a Guaranty in favor of Landlord in the form attached hereto as
SCHEDULE "B" and incorporated herein by this reference.
(m) REPORTS. Tenant agrees to furnish to Landlord, with
reasonable promptness: (1) copies of financial statements of Tenant and each
Guarantor (including, but not limited to, annual balance sheets, income
statements and surplus statements, certified by independent certified public
accountants) ; and (2) other financial statements, reports and documents which
the Tenant and each Guarantor (i) files with or otherwise sends to the
Securities and Exchange Commission, whether pursuant to the Securities Act of
1933, as amended, or the Securities Exchange Act of 1934 including, without
limitation, Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current
Report on Form 8-K and Proxy Statements and other soliciting materials; (ii)
files with any other governmental commission, department or agency or any
securities exchange; and (iii) sends to or makes available to its shareholders.
In addition to the foregoing, Tenant shall obtain and deliver to Landlord, (a)
with reasonable promptness, such other information respecting the operation of
the Leased Premises or the financial condition and affairs of Tenant or any
Guarantors, as Landlord may from time to time reasonably request, and (b)
together with the annual reports of each Guarantor as required above, an
Officer's Certificate of such Guarantor stating that to the best of the signer's
knowledge and belief after making due inquiry, neither Tenant nor such Guarantor
is in default in the performance or observance of any of the agreements, terms,
covenants or conditions of this Lease or the Guarantee upon the part of Tenant
or the Guarantor, as the case may be, to be performed or observed (or, if so,
specifying the same and the steps being taken to remedy the same).
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(n) OWNERSHIP OF LEASED PREMISES. Tenant acknowledges
that the Leased Premises are the property of Landlord and that Tenant has only
the right to the possession and use thereof upon the terms, covenants and
conditions set forth in this Lease.
(o) ENCROACHMENTS, RESTRICTIONS, ETC. If any of the
Improvements shall, at any time, encroach upon any property, street or right of
way adjoining or adjacent to the Leased Premises, or shall violate the
agreements or conditions contained in any restrictive covenant or other
agreement affecting the Leased Premises, or any part thereof, or shall hinder or
obstruct any easement or right-of-way to which the Leased Premises are subject,
or shall impair the rights of others under such easement or right-of-way, then
promptly upon the request of the Landlord at the behest of any persons affected
by any such encroachment, violation, hindrance, obstruction or impairment,
Tenant shall, at its cost and expense, either (i) obtain valid and effective
waivers or settlements of all claims, liabilities and damages resulting from
each such encroachment, violation, hindrance, obstruction or impairment, whether
the same shall affect Landlord or Tenant, or (ii) make such changes in the
Improvements and take such other actions as shall be necessary to remove such
encroachment, hindrances or obstructions and to end such violations or
impairments, including, if necessary, but only with Landlord's prior written
consent, the alteration or removal of any of the Improvements. Any such
alteration or removal consented to by Landlord shall be made by Tenant in
accordance with the requirements of Section 9, above. Tenant's obligations under
this subsection 32(p) shall survive the expiration or sooner termination of this
Lease.
(p) ACCEPTANCE OF SURRENDER. No surrender to Landlord of
this Lease or of the Leased Premises, or any part thereof, or of any interest
therein, shall be valid or effective unless agreed to and accepted in writing by
Landlord and consented to in writing by any and all Mortgagees, and no act or
omission by Landlord or any representative or agent of Landlord, other than such
a written acceptance by Landlord, consented to as aforesaid, shall constitute an
acceptance of any such surrender. Furthermore, no receipt of money by Landlord
from Tenant after termination of this Lease or the service of any notice of
commencement of any suit or final judgment for possession shall reinstate,
continue or extend the term of this Lease or affect any such notice, demand,
suit or judgment.
(q) CONSENT BY LANDLORD. Wherever in this Lease Landlord
agrees not to unreasonably withhold its consent or approval, or words of like
import, Tenant agrees that it shall not be unreasonable for Landlord to withhold
such consent or approval (i) if by granting such consent or approval Landlord
shall be in violation of any Mortgage, or (ii) any Mortgagee shall not give its
consent or approval thereto where its consent or approval is required by the
terms of its Mortgage. Anything herein contained to the contrary
notwithstanding, any consent or approval given by Landlord hereunder this Lease
with respect to any act or matter to which a Mortgagee is entitled by the terms
of its Mortgage to consent or approve shall be of no force or effect, and shall
be deemed to have been withheld, unless accompanied by the written consent or
approval of such Mortgagee. In the event that a claim or adjudication is made
that Landlord has acted unreasonably or unreasonably delayed acting in any case
where by law or under this Lease
29
it has an obligation to act reasonably or promptly, Landlord shall not be liable
for any monetary damages and Tenant's remedies shall be limited to injunctive
relief or declaratory judgment.
(r) TIME OF ESSENCE. It is understood and agreed between
the parties hereto that time is of the essence of all the terms and provisions
of this Lease.
(s) ATTORNEYS FEES. If either party defaults in the
performance of any of the terms or provisions of this Lease and by reason
thereof the other party employs the services of any attorney to enforce
performance of the covenants, or to perform any service based upon defaults,
then in any of said events the prevailing party shall be entitled to receive
from the other party reasonable attorneys fees and all expenses and costs
incurred by the prevailing party pertaining thereto (including costs and fees
relating to any appeal) and in enforcement of any remedy.
(t) BROKERAGE. Tenant represents that it has dealt with
no broker, salesman, agent or other person in connection with this transaction
and that no broker, salesman, agent or other person brought about this
transaction. Tenant agrees to indemnify and hold Landlord harmless from and
against any claims by any other broker, salesman, agent or other person claiming
a commission or other form of compensation by virtue of heaving dealt with
Tenant with regard to this leasing transaction. Landlord agrees to indemnify and
hold Tenant harmless from and against any claims by any other broker, salesman,
agent or other person claiming a commission or other form of compensation by
virtue of heaving dealt with Landlord with regard to this leasing transaction.
The provisions of this subsection 32(t) shall survive the expiration or sooner
termination of this Lease.
33. BANKRUPTCY OR INSOLVENCY The Landlord and Tenant acknowledge
and agree that the provisions of this Section 33 shall control notwithstanding
anything to the contrary contained herein.
(a) In the event that Tenant shall become a debtor under
Chapter 7 of the Bankruptcy Code and Tenant's trustee or Tenant shall elect to
assume this Lease for the purpose of assigning the same or otherwise, such
election and assignment may be made only if the provisions of this Section 33
are satisfied. If Tenant or Tenant's trustee shall fail to assume this Lease
within 60 days after the entry of an order for relief, this Lease shall be
deemed to have been rejected. Immediately thereupon Landlord shall be entitled
to possession of the Leased Premises without further obligation to Tenant or
Tenant's trustee and this Lease, upon the election of Landlord, shall terminate,
but Landlord's right to be compensated for damages (including, without
limitation, liquidated damages pursuant to Section 19 or the exercise of any
other remedies in any such proceeding) shall survive, whether or not this Lease
shall be terminated.
(b) In the event that a voluntary petition for
reorganization is filed by Tenant, or an involuntary petition is filed against
Tenant under Chapter 11 of the Bankruptcy Code, or in the event of the entry of
an order for relief under Chapter 7 in a case which is then transferred to
Chapter 11, Tenant's trustee or Tenant, as debtor-in-possession must elect to
assume this Lease
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within 60 days from the date of the filing of the petition under Chapter 11 or
the transfer thereto, or Tenant's trustee or the debtor-in-possession shall be
deemed to have rejected this Lease. Immediately thereupon Landlord shall be
entitled to possession of the Leased Premises without further obligation to
Tenant or Tenant's trustee and this Lease, upon the election of Landlord shall
terminate, but Landlord's right to be compensated for damages (including,
without limitation, liquidated damages pursuant to Section 19 or the exercise of
any other remedies in any such proceeding) shall survive, whether or not this
Lease shall be terminated.
(c) No election by Tenant's trustee or the
debtor-in-possession to assume this Lease, whether under Chapter 7 or Chapter
11, shall be effective unless each of the following conditions has been
satisfied:
(i) Tenant's trustee or the debtor-in-possession
has cured all defaults under this Lease, or has provided Landlord with evidence
satisfactory to Landlord that it will cure all defaults susceptible of being
cured by the payment of money within 10 days from the date of such assumption
and that it will cure all other defaults under this Lease which are susceptible
of being cured by the performance of any act within 30 days after the date of
such assumption.
(ii) Tenant's trustee or the debtor-in-possession
has compensated, or has provided Landlord with evidence satisfactory to Landlord
that, within 10 days from the date of such assumption, it will compensate
Landlord for any actual pecuniary loss incurred by Landlord arising from the
default of Tenant, Tenant's trustee, or the debtor-in-possession as indicated in
any statement of actual pecuniary loss sent by Landlord to Tenant's trustee or
the debtor-in-possession.
(iii) Tenant's trustee or the debtor-in-possession
(A) has provided Landlord with "Assurance", as hereinbelow defined, of the
future performance of each of the obligations under this Lease of Tenant,
Tenant's trustee or the debtor-in-possession and (B) shall, in addition to any
other security deposits held by Landlord, deposit with Landlord, as security for
the timely payment of Minimum Rental and for the performance of all other
obligations of Tenant under this Lease, an amount equal to 3 monthly
installments of Minimum Rental and any percentage rental payable under this
Lease (both at the rate then payable) , and (C) pay in advance to Landlord on
the date each installment of Minimum Rental is due and payable, one-twelfth of
Tenant's annual obligations for Impositions and insurance premiums to be made by
Tenant pursuant to this Lease. The obligations imposed upon Tenant's trustee or
the debtor-in-possession by this Section 33 shall continue with respect to
Tenant or any assignee of this Lease, after the conclusion of proceedings under
the Bankruptcy Code.
(iv) Such assumption will not breach or cause a
default under any provision of any other lease, Mortgage, financing agreement or
other agreement by which Landlord is bound, relating to the Leased Premises or
any larger development of which the Leased Premises is a part.
31
(d) For purposes of subsection (c) (iii)of this Section
33, Landlord and Tenant acknowledge that "Assurance" shall mean no less than:
(i) Tenant's trustee or the debtor-in-possession has and will continue to have
sufficient unencumbered assets after the payment of all secured obligations and
administrative expenses to assure Landlord that sufficient funds will be
available to fulfill the obligations of Tenant under this Lease and (ii) to
secure to Landlord the obligations of Tenant, Tenants trustee or the
debtor-in-possession and to assure the ability of Tenant, Tenant's trustee or
the debtor-in-possession to cure the defaults under this Lease, monetary and/or
non-monetary, there shall have been: (A) sufficient cash deposited with
Landlord, or (B) the Bankruptcy Court shall have entered an order segregating
sufficient cash payable to Landlord and/or (C) Tenant's trustee or the
debtor-in-possession shall have granted to Landlord a valid and perfected first
lien and security interest and/or mortgage in property of Tenant, Tenant's
trustee or the debtor-in-possession, acceptable as to value and kind to
Landlord.
(e) In the event that this Lease is assumed in accordance
with subsection (b) of this Section 33 and thereafter Tenant is liquidated or
files, or has filed against it, a subsequent petition under any provision of the
Bankruptcy Code or any similar statute for relief of debtors, Landlord may, at
its option, terminate this Lease and all rights of Tenant hereunder, by giving
Tenant notice of its election to so terminate within 30 days after the
occurrence of either of such events.
(f) If Tenant's trustee or the debtor-in-possession has
assumed this Lease pursuant to the terms and provisions of this Section 33 for
the purpose of assigning (or elects to assign) this Lease, this Lease may be so
assigned only if the proposed assignee has provided adequate assurance of future
performance of all of the terms, covenants and conditions of this Lease to be
performed by Tenant. Landlord shall be entitled to receive all consideration for
such assignment whether cash or otherwise. As used in this subsection (f) of
this Section 33 "adequate assurance of future performance" shall mean at least
that clauses (B) and (C) of subsection (c) (iii) of this Section 33 and each of
the following conditions, has been satisfied:
(i) The proposed assignee has furnished Landlord
with a current financial statement audited by a certified public accountant
determined in accordance with generally accepted accounting principals
consistently applied indicating a credit rating, net worth and working capital
in amounts which Landlord reasonably determines to be sufficient to assure the
future performance of such assignee of Tenant's obligations under this Lease,
but in no event indicating a net worth less than the net worth of the Tenant and
any Guarantors of this Lease, on the date of execution hereof.
(ii) Such assignment will not breach or cause a
default under any provision of any other lease, Mortgage, financing agreement or
other agreement by which Landlord is bound, relating to the Leased Premises or
any larger development of which the Leased Premises is a part.
(iii) The proposed assignment will not release or
impair any Guarantee under this Lease.
32
(g) When, pursuant to the Bankruptcy Code, Tenant's
trustee or the debtor-in-possession shall be obligated to pay reasonable use and
occupancy charges for the use of the Leased Premises, such charges shall not be
less than the Minimum Rental and all additional rent payable by Tenant under
this Lease and shall be paid at the times and when due as though such charges
were Minimum Rental and additional rent.
(h) Anything in this Lease to the contrary
notwithstanding, neither the whole nor any portion of Tenant's interest in this
Lease or its estate in the Leased Premises shall pass to any trustee, receiver,
assignee for the benefit of creditors, or any other similar person or entity or
otherwise by operation of law under the Bankruptcy Code or any similar federal
statute now or hereinafter enacted, or under the laws of any state having
jurisdiction of the person or property of Tenant unless Landlord shall have
consented to such transfer in writing. No acceptance by Landlord of rent or any
other payments from any such trustee, receiver, assignee, person or other entity
shall be deemed to constitute such consent by Landlord nor shall it be deemed a
waiver of Landlord's right to terminate this Lease for any transfer of Tenant's
interest under this Lease without such consent.
34. LATE CHARGES
(a) Tenant hereby acknowledges that late payment by
Tenant to Landlord of rent and other sums due hereunder will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed on
Landlord by the terms of any mortgage or trust deed encumbering the Premises.
Accordingly, if any installment of rent or any other sum due from Tenant shall
not be received by Landlord or Landlord's designee within ten (10) days after
the date on which such sum is due, Tenant shall pay to Landlord a late charge
equal to 3% of such overdue amount. The parties hereby agree that such late
charge represents a fair and reasonable estimate of the costs Landlord will
incur by reason of late payment by Tenant. Acceptance of such late charge by
Landlord shall in no event constitute a waiver of Tenant's default. with respect
to such overdue amount, nor prevent Landlord from exercising any of the other
rights and remedies granted hereunder.
(b) Any amount due Landlord not paid within ten (10) days
after the date on which such amount is due shall bear interest at the Maximum
Rate from the due date of such amount. Payment of such interest shall not excuse
or cure any default by Tenant under this Lease.
35. DEFINITIONS
For the purposes of this Lease, the following definitions shall be
applicable:
Bankruptcy Code - as defined in Section 19.
Control - as defined in Section 19.
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Event of Default - as defined in Section 19.
Guarantee - any agreements or undertakings, written or otherwise, by
virtue of which any Guarantors guaranty the performance or observance of
any or all of the terms, covenants or conditions to be performed or
observed by Tenant under this Lease.
Guarantor - any persons, firms or entities who or which guaranty the
performance or observance of any or all of the terms, covenants or
conditions to be performed or observed by Tenant under this Lease.
Impositions - as defined in Section 5 (b).
Improvements - as defined in Section 1.
Landlord - as defined in Section 24.
Laws - as defined in Section 2 (a).
Lease Year - Any twelve (12) month period during the term of this Lease
commencing on the first day of the first full calendar month of the term
of this Lease.
Leased Premises - as defined in Section 1.
Maximum Rate - an annual rate of interest equal to eighteen percent
(18%) but in no event in excess of the maximum lawful rate permitted to
be charged by a Landlord against a defaulting Tenant for monies advanced
by reason of a Tenant's default.
Minimum Rental - as defined in Section 3.
Mortgage - any Mortgage, deed of trust or other security interest now
existing or hereafter created on all or any portion of Landlord's
interest in this Lease and/or the Leased Premises.
Mortgagee - the holder of any Mortgage.
Person-Persons - any individual(s), partnership(s), firm(s),
corporation(s), business trust(s), estate(s), legal representative(s) or
other entities of any nature or description whatsoever.
Plans and Specifications - as defined in Section 9(a)(iv).
Successor Landlord - as defined in Section 14(C).
Tenants Change(s) - as defined in Section 9(a).
Tenant's Property - as defined in Section 13.
34
IN WITNESS WHEREOF, the parties hereto have duly executed this
instrument under seal as of the day and year first above written.
LANDLORD:
LJH, LTD.
By: DLH Management, L.L.C.,
its General Partner
By: /s/ Xxxx X. Xxxxxx
-----------------------------------------
Xxxx X. Xxxxxx, President
TENANT:
AIRCRAFT INTERIOR DESIGN, INC.
By: /s/ Xxx X. Xxxxxx, Xx.
---------------------------------------------------
Name: Xxx X. Xxxxxx, Xx.
-------------------------------------------------
Title: Chairman and Chief Executive Officer
------------------------------------------------
SCHEDULE A
THE LAND
BEING a tract of land situated in the Xxxxxxxx Xxxxxx Survey, Abstract Xxxxxx
00, xx xxx Xxxx xx Xxxxxx, Xxxxxx Xxxxxx, Xxxxx; and also being all of Lots 6,
7, 8 and the east 9 feet of Xxx 0, Xxxxx 0/0000 xx XXXXXXX XXXXX XXXXXXXXXX
XXXX, an addition to said City of Dallas as recorded in Volume 895, Page 1363,
Plat Records of Dallas County, Texas, and being more particularly described by
metes and bounds as follows:
BEGINNING, at an "x" cut found for corner situated in the intersection of the
north line of Nova Drive (60' R.O.W.) and the west line of Grissom Lane (60'
R.O.W.);
THENCE, S 89(0)43'49"W, along the north line of said Nova Drive, a distance of
609.00 feet to a 5/8" iron rod found for corner;
THENCE, N 00(0)16'11"W, departing said north line of Nova Drive, a distance of
609.00 feet to a 5/8" iron rod found for corner;
THENCE, N 89(0)43'49"E, a distance of 610.45 feet to a 5/8" iron rod found for
corner situated in the west line of said Grissom Lane;
THENCE, S 00(0)02'19"W, along the west line of said Grissom Lane, a distance of
270.00 feet to the POINT OF BEGINNING and containing 164,623 square feet or
3.779 acres of land.
A-1
SCHEDULE B
GUARANTY
In order to induce LJH, LTD., a Texas limited partnership ("Landlord"),
to execute the foregoing Lease ("the Lease") with AIRCRAFT INTERIOR DESIGN, INC.
("Tenant"), for premises located at 0000 Xxxx Xxxxx, Xxxxxx, Xxxxxx Xxxxxx,
Xxxxx, the undersigned (whether one or more than one) has guaranteed and by this
instrument does hereby guarantee the payment and performance of all liabilities,
obligations and duties (including, but not limited to, payment of rent) imposed
upon Tenant under the terms of the Lease, for the full term of the Lease and any
extension thereof, as if the undersigned has executed the Lease as Tenant
thereunder.
The undersigned hereby waives notice of acceptance of this Guaranty and
all other notices in connection herewith or in connection with the liabilities,
obligations and duties guaranteed hereby, including notices of default by Tenant
under the Lease, and waives diligence, presentment and suit on the part of
Landlord in the enforcement of any liability, obligation or duty guaranteed
hereby.
The undersigned further agrees that Landlord shall not be first
required to enforce against Tenant or any other person any liability, obligation
or duty guaranteed hereby before seeking enforcement thereof against the
undersigned. Suit may be brought and maintained against the undersigned by
Landlord to enforce any liability, obligation or duty guaranteed hereby without
joinder of Tenant or any other person. The liability of the undersigned shall
not be affected by any indulgence, compromise, settlement or variation of terms
which may be extended to Tenant by Landlord or agreed upon by Landlord and
Tenant, and shall not be impaired, modified, changed, released or limited in any
manner whatsoever by any impairment, modification, change, release, or
limitation of the liability of Tenant or its estate in bankruptcy, or of any
remedy for the enforcement thereof, resulting from the operation of any present
or future provision of the United States Bankruptcy Code, or any similar law or
statute of the United States or any State thereof. Landlord and Tenant, without
notice to or consent by the undersigned, may at any time or times enter into
such extensions, amendments, assignments, subleases, or other covenants
respecting the Lease as they may deem appropriate; and the undersigned shall not
be released thereby, but shall continue to be fully liable for the payment and
performance of all liabilities, obligations and duties of Tenant under the Lease
as so extended, amended, assigned or otherwise modified.
It is understood that other agreements similar to this Guaranty may, at
Landlord's sole option and discretion, be executed by other persons with respect
to the Lease. This Guaranty shall be cumulative of any such agreements and the
liabilities and obligations of the undersigned hereunder shall in no event be
affected or diminished by reason of such other agreements. Moreover, in the
event Landlord obtains another signature of more than one guarantor on this page
or by obtaining additional guaranty agreements, or both, the undersigned agrees
that Landlord, in Landlords' sole discretion, may (i) bring suit against all
guarantors of the Lease jointly and severally or against any one or more of
them, (ii) compound or settle with any one or more of the guarantors from
liability. The undersigned further agrees that no such action shall impair the
rights of
B-3
Landlord to enforce the Lease against any remaining guarantor or guarantors,
including the undersigned.
The undersigned officer personally represents and warrants that the
Board of Directors of such corporation, in a duly held meeting, has determined
that this Guaranty may reasonably be expected to benefit the corporation.
The undersigned agrees that if Landlord shall employ an attorney to
present, enforce or defend all of Landlord's rights or remedies hereunder, the
undersigned shall pay any reasonable attorney's fees incurred by Landlord in
such connection.
This agreement shall be binding upon the undersigned and the
successors, heirs, executors and administration of the undersigned, and shall
inure to the benefit of Landlord and Landlord's heirs, executors,
administrators, and assigns.
EXECUTED, this ______ day of ______, 2002, to be effective the same day
as the effective date of the Lease.
GUARANTOR: TIMCO AVIATION SERVICES, INC.,
a Delaware corporation
By:
----------------------------------------------------------
Name:
--------------------------------------------------------
Title:
-------------------------------------------------------
Notice Address: 000 Xxxxx Xxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xx. Xxxx Xxxxxx
