EXHIBIT 10.1
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COMMERCIAL LEASE
CHATTEM, INC., INC. hereafter referred to as Lessee, hereby offers to Lease
from KENCO GROUP, INC., hereafter referred to as Lessor, the Premises
situated in the city of Chattanooga, county of Xxxxxxxx, state of Tennessee,
described as 100,000 Sq. Ft. of warehouse space located in that certain
building owned by Lessor located at 0000 Xxxxxxxxxxxx Xxxxxx, Xxxxxxxxxxx,
XX, (the "Premises") upon the following TERMS and CONDITIONS:
1. TERM: The term hereof shall commence on or about April 1, 1998 and
expires July 1, 1998 (the "Initial Term"); provided, however, Lessee
shall have the right to terminate this Lease at anytime upon 30 days
prior written notice thereof to Lessor. In the event the Lease is
not terminated prior to expiration of the initial term or if Lessee
does not deliver written notice to Lessor of its election not to
renew this Lease, the term thereof shall automatically renew on a
month-to-month basis upon expiration of the initial term subject to
the terms hereof, and subject to the right of either party
thereafter to terminate the Lease subject to 30 days prior written
notice. Rent for partial month shall be prorated.
2. RENT: Rent shall be a gross payment of $25,000 per month calculated
a $0.25 per S.F. times 100,000 S.F. per month, which shall include
all real estate taxes, insurance and all other charges except as
provided in paragraph 11 and paragraph 12. All rents shall be paid
to Owner or his authorized agent, at the following address: X.X. Xxx
0000, Xxxxxxxxxxx, Xxxxxxxxx 00000, or at such other places as may
be designated by Owner from time to time.
3. USE: Distribution shall be defined as warehousing, light assembly
and product distribution.
4. USE PROHIBITED: Lessee shall not use any portion of the Premises
for purposes other than those specified hereinabove, and no use
shall be made or permitted to be made upon the Premises, nor acts
done, which will increase the existing rate of insurance upon the
Premises, or cause cancellation of insurance policies covering said
Premises. Lessee shall not conduct or permit any sale by auction on
the Premises.
5. ASSIGNMENT AND SUBLETTING: Lessee shall not assign this Lease or
sublet any portion of the Premises without prior written consent of
the Lessor, which shall not be unreasonably withheld. Any such
assignment or subletting without consent shall be void and, at the
option of the Lessor, may terminate this Lease.
"Notwithstanding the foregoing; Lessor in executing this Lease
acknowledges that Lessee has assigned or may assign its right, title
and
interest under this Lease as security for financing provided to
Lessee by one or more lenders. Notwithstanding any other provisions
contained in this Lease, Lessor consents to the collateral
assignment of this Lease to such lenders or their agents, for the
benefit of the lenders. Unless and until such lenders give notice to
the undersigned of their intention to succeed to the rights of Lease
under this Lease, the lenders shall not be obligated to perform any
of the obligations of Lessee under the Lease."
6. ORDINANCES AND STATUTES: Lessee shall comply with all statutes,
ordinances and requirements of all municipal, state and federal
authorities now in force, or which may hereafter be in force,
pertaining to the Premises, and the use thereof by Lessee. The
commencement of pendency of any state or federal court abatement
proceeding affecting the use of the Premises shall, at the option of
the Lessor, by deemed a breach thereof.
7. MAINTENANCE, REPAIRS, ALTERATIONS: Lessee acknowledges that the
Premises are in good order and repair, unless otherwise indicated
herein, Lessee shall, at its own expense and at all times, maintain
the Premises in good and safe condition, normal wear and tear
expected, including plate glass, electrical wiring, plumbing and
heating installations and any other system or equipment which serves
solely the Premises and shall surrender the same, at termination
hereof, in as good condition as received, normal wear and tear
expected. Lessee shall be responsible for all repairs required for
the Premises as specified herein, excepting the xxxx, exterior
walls, structural foundations, which shall be maintained by Lessor
and any repairs to the Premises required due to the negligence or
willful misconduct of Lessor or Lessor's Employees or Agents or
which result due to the failure of Lessor to comply with its
obligation pursuant hereto. Lessee shall also maintain in good
condition such portions adjacent to the Premises, such as sidewalks,
driveways, lawns and shrubbery, which would otherwise be required to
be maintained by Lessor. All other maintenance obligations not
otherwise assumed by Lessee shall be the responsibility of Lessor.
No improvement or alteration of the Premises shall be made without
the prior written consent of the Lessor which consent shall not be
unreasonably withheld. Prior to the commencement of any substantial
repair, improvement, or alteration, Lessee shall give Lessor at
least two (2) days written notice in order that Lessor may post
appropriate notices to avoid any liability for liens.
Lessee shall not commit any waste upon the Premises, or any nuisance
or act which may disturb the quiet enjoyment of any Lessee in the
building.
8. ENTRY AND INSPECTION: Lessee shall permit Lessor or Lessor's agents
enter upon the Premises at reasonable times and upon reasonable
notice, for the purpose of inspecting the same, and will permit
Lessor at any time within sixty (60) days prior to the expiration of
this Lease, to place upon the Premises any usual "To Let" or "For
Lease" signs, and permit persons
desiring to Lease the same to inspect the Premises thereafter.
9. INDEMNIFICATION OF LESSOR: Lessor shall not be liable for any
damage or injury to Lessee, or any other person, or to any Premises,
occurring on the Premises or any part thereof, and Lessee agrees to
hold Lessor harmless from any claims for damages; provided however,
such indemnification obligations shall not apply to claims for
damages or injuries which are attributed to the act or negligence of
Lessor or Lessor's Agents or Employees.
10. POSSESSION: If Lessor is unable to deliver possession of the
Premises at the commencement hereof, Lessor shall not be liable for
any damage caused thereby, nor shall this Lease be void or
voidable, but Lessee shall not be liable for any rent until
possession is delivered. Lessee may terminate this Lease at anytime
if possession is not delivered within 1 days of the commencement of
the term hereof without further obligations hereunder.
11. INSURANCE: Lessee, at its expense, shall maintain plate glass and
public liability insurance including bodily injury and Premises
damage insuring Lessee and Lessor with minimum coverage as follows:
$1,000,000.00
Lessee shall provide Lessor with a Certificate of Insurance showing
Lessor as additional insured. The Certificate shall provide for a
ten-day written notice to Lessor in the event of cancellation or
material change of coverage.
To the maximum extent permitted by insurance policies which may be
owned by Lessor or Lessee, Lessee and Lessor, for the benefit of
each other, waive any and all rights of subrogation which might
otherwise exist.
12. UTILITIES: Lessor shall be responsible for all gas and water
service utilities. Lessee shall be responsible for all electricity
service which shall be paid by Lessor and billed back to Lessee
without additional charges. Lessee shall pay a quarterly fee for
fire service charged by Tennessee-American Water Company for the
Premises on a pro rata share of such fee based upon the square
footage of the Premises. The fire service charge will be paid to
Tennessee-American Water Company by Lessor and billed back to Lessee
without additional charges. Lessor will complete installation of
burglary protection by ADT at Lessor's expense and Lessee will pay
monthly charges for ADT service.
13. SIGNS: Lessor reserves the exclusive right to the roof, side and
rear walls of the Premises. Lessee shall not construct
any projecting sign or awning without the prior written consent of
Lessor which consent shall not be unreasonably withheld.
14. ABANDONMENT OF PREMISES: Lessee shall not vacate or abandon the
Premises at any time during the term hereof, and if Lessee shall
abandon or vacate the Premises, or be dispossessed by process, of
law, or otherwise, any personal Premises belonging to Lessee left
upon the Premises shall be deemed to be abandoned at the option of
Lessor.
15. CONDEMNATION: If any part of the Premises shall be taken or
condemned for public use, and a part thereof remains which is
susceptible of occupation hereunder, this Lease shall, as to the
part taken, terminate as of the date the condemnor acquires
possession, and thereafter Lessee shall be required to pay such
proportion of the rent for the remaining term as the value of the
Premises remaining bears to the total value of the Premises at the
date of condemnation; provided however, the Lessor may at its
option, terminate this Lease as of the date the condemnor acquires
possession. In the even that the deemed Premises are condemned in
whole, or that such portion is condemned that the remainder is not
susceptible for use hereunder, this Lease shall terminate upon the
date of such taking. All sums which may be payable on account of any
condemnation shall belong to the Lessor, and Lessee shall not be
entitled to any part thereof, provided however, that Lessee shall be
entitled to retain any amount awarded to it or its trade fixtures or
moving expenses.
16. TRADE FIXTURES: Any and all improvements made to the Premises
during the term hereof shall belong to the Lessor, except trade
fixtures of the Lessee. Lessee may, upon termination hereof remove
all his trade fixtures, but shall repair or pay for all repairs
necessary for damages to the Premises occasioned by removal, normal
wear and tear expected.
17. DESTRUCTION OF PREMISES: In the event of a partial destruction of
the Premises during the term hereof, from any cause, Lessor shall
forthwith repair the same, provided that such repairs can be made
within thirty (30) days under existing governmental laws and
regulations, but such partial destruction shall not terminate this
Lease, except that Lessee shall be entitled to a proportionate
reduction of rent while such repairs are being made, based upon the
extent to which the making of such repairs shall interfere with the
business of Lessee on the Premises. If such repairs cannot be made
within said sixty (60) days, Lessor, at its option, may make the
same within a reasonable time, this Lease continuing in effect with
the rent proportionately abated as aforesaid, and in the event that
Lessor shall not elect to make such repairs which cannot be made
within thirty (30) days, this Lease may be terminated at the option
of either party.
In the event that the building in which the Premises may be situated
is destroyed to an extent of not less than one-third of the
replacement costs thereof, Lessor may elect to terminate this Lease
whether the Premises be injured or not. A total destruction of the
building in which the Premises may be situated shall terminate this
Lease.
18. INSOLVENCY: In the event a receiver is appointed to take over the
business
of Lessee, or in the event Lessee makes a general assignment for the
benefit of creditors, or Lessee takes or suffers any action under
any insolvency or bankruptcy act, the same shall constitute breach of
this Lease by Lessee.
19. REMEDIES OF OWNER ON DEFAULT: In the event of any breach of this
Lease by Lessee, Lessor may, at its option, terminate the Lease and
recover from Lessee: (a) the worth at the time of award of the
unpaid rent which was earned at the time of termination; (b) the
worth at the time of award of the amount by which the unpaid rent
which would have been earned after termination until the time of the
award exceeds the amount of such rental loss that the Lessee proves
could have been reasonably avoided: and (c) the worth at the time of
award of the amount by which the unpaid rent for the balance or the
term after the time of award exceeds the amount of such rental loss
that Lessee proves could be reasonably avoided.
Lessor may, in the alternative, continue this Lease in effect, as
long as Lessor does not terminate Lessee's right to possession, and
Lessor may enforce all his rights and remedies under the Lease,
including the right to recover the rent as it becomes due under the
Lease. If said breach of Lease continues, Lessor may, at any time
thereafter, elect to terminate the Lease.
Nothing contained herein shall be deemed to limit any other rights
or remedies which Lessor may have.
20. SECURITY: The security deposit set forth above, if any, shall
secure the performance of the Lessee's obligations hereunder Lessor
may, but shall not be obligated to apply all or portions of said
deposit on account or Lessee's obligations hereunder. Any balance
remaining upon termination shall be returned to Lessee. Lessee shall
not have the right to apply the Security Deposit in payment of the
last month's rent.
21. DEPOSIT REFUNDS: The balance of all deposits shall be refunded
within two weeks from date possession is delivered to Owner or
authorized Agent, together with a statement showing any charges made
against such deposits by Owner.
22. ATTORNEY'S FEES: In case suit should be brought for recovery or the
Premises, or for any sum due hereunder, or because of any act which
may arise out of the possession of the Premises, by either party,
the prevailing party shall be entitled to all costs incurred in
connection with such action, including a reasonable attorney's fee.
23. WAIVER: No failure of Lessor to enforce any term hereof shall be
deemed to be a waiver.
24. NOTICES: Any notice which either party may or is required to give,
shall be
given by mailing the same, postage prepaid, to Lessee at the
Premises, or Lessor at the address shown below, or at such other
places as may be designated by the parties from time to time.
25. TIME: Time is of the essence of this Lease.
26. HEIRS, ASSIGNS, SUCCESSORS: This Lease is binding upon and inures
to the benefit of the heirs, assigns and successors in interest to
the parties.
27. SALES TAX: In the event that any federal, state or local law is
passed during the term of this Lease on any extension or extensions
thereof, requiring the payment of a sales tax based on the amount
of rent to be paid by the Lessee under this Lease or in any manner
subjecting the rent provided in this Lease to any form of sales tax
by whatever name it may be designated such tax shall be the
obligation of and shall be paid Lessee as specified in this Lease.
28. LESSOR'S LIABILITY: The term "Lessor", as used in this paragraph,
shall mean only the owner of the real Premises or a Lessee's
interest in a ground Lease of the Premises. In the event of any
transfer of such title or interest, the Lessor named herein (or the
grantor in case of any subsequent transfers) shall be relieved of
all liability related to Lessor's obligations to be performed after
such transfer. Provided, however, that any funds in the hands of
Lessor or Grantor at the time of such transfer shall be delivered to
Grantee. Lessor's aforesaid obligations shall be binding upon
Lessor's successors and assigns only during their respective periods
of ownership.
29. ESTOPPEL CERTIFICATE:
(a) Lessee shall at any time upon not less than ten (10) days' prior
written notice from Lessor execute, acknowledge and deliver to
Lessor a statement in writing (1) certifying that this Lease is
unmodified and in full force and effect (or, if modified, stating
the nature of such modification and certifying that this Lease, as
so modified, is in full force and effect), the amount of any
security deposit, and the date to which the rent and other charges
are paid in advance, if any, and (2) acknowledging that there are
not, to Lessee's knowledge, any uncured defaults on the part of
Lessor hereunder, or specifying such defaults if any are claimed.
Any such statement may be conclusively relied upon by any
prospective purchaser or encumbrance to the Premises.
(b) At Lessor's option, Lessee's failure to deliver such statement
within such time shall be a material breach of this Lease or shall
be conclusive upon Lessee (1) that this Lease is in full force and
effect, without modification except as may be represented by Lessor,
(2) that there are no uncured defaults in Lessor's performance, and
(3) that not more than one month's rent has been paid in advance or
such failure may be considered by Lessor as a default by Lessee
under this Lease.
30. HAZARDOUS MATERIALS - LESSOR'S PRIOR CONSENT:
Notwithstanding anything contained in this Lease to the contrary,
Lessee shall not cause or permit any Hazardous Materials to be
brought upon, kept, stored, discharged, released or used in, under
or about the Premises by Lessee, its agents, employees, contractors,
subcontractors, licensees or invitees, unless Hazardous Materials
are used, and stored in a manner that complies with all OSHA
regulations concerning handling and storage of hazardous materials.
31. Lessee shall have quiet enjoyment of the Premises during term of
this Lease provided all covenants of the Agreement are adhered to.
32. Lessor shall indemnify and hold Lessee harmless from and against all
claims, liabilities, damages, penalties and fines attributable or
arising out of the presence of environmental contamination at the
Premises or the property upon which the Premises are located which is
the result of the activities, actions or negligence of parties
other than Lessee or which results from the violation of any
federal, state or local statute, regulation or ordinances applicable
to the environment (The "Environment Laws") by a party other than
Lessee. Lessor represents and warrants that it is unaware of the
presence of any environmental contamination at the Premises or the
property upon which the Premises is located or the violation of any
Environment Laws.
ENTIRE AGREEMENT: The foregoing constitutes the entire agreement between
the parties and may be modified only by a writing signed by both parties.
The parties' execution hereof:
ACCEPTANCE
Chattem, Inc. Kenco Group, Inc.
By: /s/ A. XXXXXXXXX XXXXXX By: /s/ XXX XXXXX
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Title: Pres. Title: V.P./Sec
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000 X. 00xx Xx
Address: 0000 X 00xx Xx. Address: P.O. Box 1607
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Xxxxxxxxxxx, XX 00000 Xxxxxxxxxxx, XX 00000
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Phone: (000) 000-0000 x 000 Phone: 000-000-0000
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