Exhibit 10(ee)
FIRST AMENDMENT TO LEASE AGREEMENT
AND AGREEMENT
THIS FIRST AMENDMENT TO LEASE AGREEMENT AND AGREEMENT (the "First
Amendment"), is entered into as of October 31, 2003, by and between XXXXXXXXX
FIELD PARTNERS, LLC, a California limited liability company ("Landlord") and
SPARKS EXHIBITS, LTD., a California corporation ("Tenant"), with reference to
the following facts:
A. Landlord and Tenant are all of the parties to that certain Lease
Agreement dated as of June 29, 1998 (the "Lease"), wherein Landlord leased to
Tenant certain real property located at 0000 Xxxxxxxxx Xxx, Xx Xxxxx,
Xxxxxxxxxx, having located thereon a single industrial building (the "Building")
containing approximately 150,159 square feet of space (the "Original Premises").
B. Subsequent to execution of the Lease, Tenant's business requirements
have changed and Tenant has requested that Landlord assist Tenant in locating a
tenant to lease a portion of the Original Premises. In accordance with Tenant's
request, Landlord has identified G.T.M. Wholesale Liquidators Inc. ("GTM") as a
prospective tenant to lease a portion of the Original Premises comprising
approximately 40,694 square feet (the "GTM Premises") and GTM is willing to
lease the GTM Premises.
C. Landlord and GTM have negotiated prospective lease terms for the GTM
Premises, which lease terms are substantially as set forth in that certain
Irrevocable Offer to Lease dated as of October 21, 2003, in the form attached to
this First Amendment as Exhibit A (the "Offer"), having appended thereto that
certain Lease Agreement dated as of September 18, 2003 (the "GTM Lease").
D. Landlord and Tenant desire to memorialize in writing the terms and
conditions upon which Landlord and Tenant will mutually cooperate and undertake
to pay for and construct certain tenant improvements which are required by the
GTM Lease (the "GTM Tenant Improvements"), and upon occupancy by GTM of the GTM
Premises and the satisfaction and/or fulfillment of the other terms and
provisions of this First Amendment, the Lease will be and become partially
terminated with respect to the portion of the Original Premises constituting the
GTM Premises.
NOW, THEREFORE, in consideration of the mutual covenants, agreements
and undertakings contained in this First Amendment and the exchange of other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. Unless defined in this First Amendment, or except as
otherwise expressly provided in this First Amendment, capitalized terms utilized
in this First Amendment shall have the meanings ascribed to such terms in the
Lease, or the GTM Lease, as applicable.
2. Acknowledgement. Tenant and Sparks Exhibits Corp., a Pennsylvania
corporation ("Guarantor"), each hereby acknowledge receipt of the Offer and the
GTM Lease.
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3. Undertakings Regarding GTM Tenant Improvements. The GTM Lease
requires that Landlord install and construct the GTM Tenant Improvements.
Landlord and Tenant agree to equally share the aggregate cost of the GTM Tenant
Improvements. The estimated cost to construct and install the GTM Tenant
Improvements is attached to this First Amendment as Exhibit B (the "Cost
Breakdown"). Landlord and Tenant each hereby approve the Cost Breakdown and the
GTM Tenant Improvements. Tenant specifically acknowledges, agrees and
understands that the GTM Tenant Improvements include, among other things, a
demising wall physically separating the GTM Premises, separate metering of
utilities, separate legal access to the GTM Premises and other legal and
business requirements to configure the GTM Premises as separate space from the
Original Premises. Concurrently upon the execution of this First Amendment,
Tenant shall deposit, in cash in one lump sum, 50 percent of the aggregate
estimated cost of the GTM Tenant Improvements with Landlord and Tenant
understands and agrees that Landlord shall not be required to commence
construction and installation of the GTM Tenant Improvements unless and until
Tenant deposits the sums with Landlord referred to in the preceding sentence.
Landlord shall undertake to construct and install, in accordance with the terms
and provisions of the GTM Lease, the GTM Tenant Improvements. Tenant approves
Landlord's entry into the Building and the GTM Premises in order to install and
construct the GTM Tenant Improvements, demolition and/or construction activities
necessary to configure the GTM Premises in accordance with the GTM Lease and
agrees that Landlord may take or refrain from taking any action in good faith
related to the responsibilities and undertakings of Landlord set forth in this
First Amendment. Tenant agrees to physically vacate the GTM Premises immediately
in order to allow Landlord to perform its undertakings pursuant to this Section
3 and further agrees to conduct its operations in such a manner that it will not
unreasonably interfere with the performance by Landlord of its undertakings set
forth in this Section 3. If the actual cost of the GTM Tenant Improvements
exceeds or is less than the estimated cost, Tenant shall reimburse Landlord, or
Landlord shall reimburse Tenant, as the case may be, in cash, 50 percent of any
such excess or savings, as applicable, within five calendar days of receiving
from Landlord, in writing, a breakdown of the actual cost, with reasonable
supporting documentation as soon as practicable, which Landlord shall use its
best efforts to furnish to Tenant by January 1, 2004.
4. Agreement to Partially Terminate Lease; Effectiveness. Landlord
agrees with Tenant that, (i) upon payment by Tenant of Tenant's portion of the
aggregate cost of the GTM Tenant Improvements in accordance with the provisions
of Section 3 of this First Amendment, (ii) actual occupancy by GTM of the GTM
Premises on a rent paying basis, and (iii) compliance, in full, with all other
terms and conditions set forth in this First Amendment, the Lease shall, with no
further action of the parties, be terminated with respect only to the portion of
the Lease which pertains to the GTM Premises. Accordingly, the portion of the
Lease pertaining to all of the Original Premises except the GTM Premises shall
remain extant and in full force and effect, in accordance with its terms, unless
and until Landlord and Tenant shall otherwise agree in writing. Landlord and
Tenant shall execute a mutually acceptable written instrument acknowledging
partial termination of the Lease in accordance with the provisions set forth
above in this Section 4 and agreeing to such amendments and modifications of the
Lease as are necessary and appropriate to reflect the conversion of the Building
from Tenant as the single tenant occupying space therein to a multi-tenant
configuration.
5. Amendment; Confirmation; Interpretation. To the extent, but only to
the extent, necessary to give effect to this First Amendment, the Lease is
deemed amended and modified. Except to the limited extent amended and modified
hereby, the Lease is ratified and confirmed in all respects and remains extant
and in full force and effect.
6. No Agency; Leasing Commissions and Landlord's Attorneys' Fees.
Landlord and Tenant hereby acknowledge and agree that there is no agency
relationship between Landlord and Tenant, either created by this First Amendment
or otherwise. Landlord shall not be entitled to any leasing commissions in
connection with locating GTM as a tenant for the GTM Premises, or otherwise in
connection with the GTM Lease. In addition to the cost sharing arrangement
described above in Section 3 with respect to the GTM Tenant Improvements, Tenant
agrees to be responsible and liable (together with Landlord) for 50 percent each
of the actual leasing commissions (not to exceed $66,000) and Landlord's
attorneys' fees and costs related to the GTM Lease and the Landlord-Tenant
related transactions, including without limitation, negotiation and preparation
of this First Amendment and fees and costs expected to be incurred by Landlord
in connection with negotiation and preparation of the instrument partially
terminating the Lease referred to in Section 4 of this First Amendment. Landlord
has provided Tenant with good faith estimates of such leasing commissions and
Landlord's attorneys' fees and costs in Exhibit B attached hereto and
incorporated by reference herein. Tenant agrees to deposit its share of such
leasing commissions and Landlord's attorneys' fees and costs related to the GTM
Lease in full in cash with Landlord upon the earlier of, the date such
commissions and/or fees and costs are due and payable to the broker or
Landlord's attorney, as applicable, or the date upon which the Lease is to be
partially terminated as set forth in Section 4 above.
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7. Indemnification.
7.1 By Tenant. Tenant hereby agrees to indemnify and hold
Landlord, and the property and assets of Landlord, harmless, from and against
any and all liabilities, damages, losses, costs, expenses, attorneys' fees and
claims arising out of, resulting from or related to any breach or default by
Tenant in the payment or performance of any of Tenant's agreements, promises,
undertakings, obligations, responsibilities and/or liabilities under and by
reason of this First Amendment, including specifically but not by way of
limitation, Tenant's failure to vacate the GTM Premises and/or otherwise to
affect adversely Landlord's efforts to perform its responsibilities and
obligations respecting construction and installation of the GTM Tenant
Improvements.
7.2 By Landlord. Landlord hereby agrees to indemnify and hold
Tenant, and the property and assets of Tenant, harmless, from and against any
and all liabilities, damages, losses, costs, expenses, attorneys' fees and
claims arising out of, resulting from or related to any breach or default by
Landlord in the payment or performance of Landlord's agreements, promises,
undertakings, obligations, responsibilities and/or liabilities under and by
reason of this First Amendment.
8. General Provisions.
8.1 Further Assurances. Each party hereto agrees to perform
any further acts and execute and deliver any further documents that may be
reasonably necessary to effectuate the provisions of this First Amendment.
8.2 Counterparts; Fax Signatures. This First Amendment may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
Facsimile signatures shall have the same force and effect as original
signatures.
8.3 Severability. If any provisions, or portions thereof, of
this First Amendment or the application thereof are held to be unenforceable or
invalid by any court of competent jurisdiction, the remainder of this First
Amendment shall not be affected thereby and to this end only the provisions of
this First Amendment are declared severable.
8.4 Successors and Assigns. Subject to the provisions of
Section 8.10 of this First Amendment, all terms of this First Amendment shall be
binding on and shall inure to the benefit of and be enforceable by the parties
hereto and their respective heirs, legal representatives, successors and
assigns.
8.5 Governing Law; Venue. This First Amendment shall be
governed by, construed and enforced in accordance with the laws of the State of
California and is to be performed in San Diego County, California and any action
or other proceeding brought to enforce or interpret this First Amendment shall
be brought in San Diego County, California.
8.6 Waiver. No waiver of any of the provisions of this First
Amendment shall be deemed, or shall constitute, a waiver of any other provision,
whether or not similar, nor shall any waiver constitute a continuing waive. No
failure to enforce any right or provision hereunder shall preclude or affect the
later enforcement of such right or provision. No waiver shall be binding unless
executed by the party making the waiver.
8.7 Time. Time is of the essence with respect to the
performance by each party of its rights and obligations hereunder.
8.8 Attorneys' Fees. In the event any attorney is employed by
either party to this First Amendment with regard to any legal action,
arbitration or other proceeding brought by either party for the enforcement or
interpretation of this First Amendment, or because of any alleged dispute,
breach, default, or misrepresentation involving any provisions of this First
Amendment, the party prevailing in any such proceeding shall be entitled to
recover reasonable attorneys' fees and other costs and expenses incurred, in
addition to any other relief to which it may be entitled.
8.9 No Joint Venture. The parties hereto are independent of
one another and no joint venture, partnership or other collaborative venture is
intended or implied by the provisions of this First Amendment.
8.10 Assignment. Neither party may assign this First Amendment
nor any of its respective rights, liabilities and obligations under this First
Amendment without the prior written consent of the other party, which may be
given or withheld in such party's sole and unreviewable discretion.
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8.11 Entire Agreement. This First Amendment, together with the
Lease, constitutes the entire agreement between the parties pertaining to the
subject matter contained in this First Amendment and supersedes all prior and
contemporaneous agreements, representations and understandings of the parties
with respect thereto. There are no representations, warranties, agreements or
understandings, express or implied, written or oral between the parties hereto
relating to the subject matter of this First Amendment which are not fully
expressed herein.
8.12 Amendment. No supplement, amendment, modification,
discharge or change of this First Amendment shall be binding unless executed in
writing by all of the parties.
8.13 Authority. If a party to this First Amendment is a
corporation or other entity which is not a natural person, each individual
executing this First Amendment on behalf of said corporation or other entity
represents and warrants that he is duly authorized to execute and deliver this
First Amendment on behalf of said corporation or other entity in accordance with
a duly adopted resolution of the board of directors of such corporation or the
governing authority of such other entity or in accordance with the bylaws of
such corporation or governing instrument(s) of such other entity, and that this
First Amendment is binding upon such corporation or other entity in accordance
with its terms.
IN WITNESS WHEREOF, the parties have executed this First Amendment as
of the date first set forth above.
Landlord: Tenant:
XXXXXXXXX FIELD PARTNERS, LLC SPARKS EXHIBITS, LTD.,
a California limited liability company a California corporation
By: ____________________________ By: ________________________
[Signature] [Signature]
____________________________ ________________________
[Print Name and Title] [Print Name and Title]
Guarantor's Acknowledgement:
The undersigned, as Guarantor (defined above in this First Amendment)
of the Lease (defined above in this First Amendment), (i) agrees to and
acknowledges the terms and provisions of the First Amendment set forth above,
(ii) hereby requests that Landlord undertake the activities described above in
this First Amendment with respect to the GTM Lease (defined above in this First
Amendment) and (iii) agrees that nothing contained in this First Amendment shall
affect the validity or enforceability of the Continuing Guaranty of Lease dated
as of June 29, 1998 (the "Guaranty"), given by Guarantor to Landlord in
connection with Tenant's execution and performance of the Lease.
SPARKS EXHIBITS CORP.,
a Pennsylvania corporation
By: ______________________
[Signature]
______________________
[Print Name and Title]
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EXHIBIT A
OFFER AND GTM LEASE
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EXHIBIT B
GTM TENANT IMPROVEMENTS COST BREAKDOWN
AND ESTIMATED BROKERAGE COMMISSIONS AND
LANDLORD'S ATTORNEYS' FEES AND COSTS
GTM Tenant Improvements Cost Breakdown (Estimated)
--------------------------------------------------
Demising Wall $ 26,000
Dock Door $ 16,000 (Two--$8,000 each)
Electrical $ 12,000
Office/Restroom Improvements
and Retrofitting $ 55,000
--------
Total Estimated GTM Tenant
Improvements Costs $109,000
Leasing Commissions (Estimated) $ 66,000
-------------------------------------
Landlord Attorneys' Fees
and Costs (Estimated) $ 12,000
------------------------------
Total Estimated GTM Tenant
Improvement Costs, Leasing
Commissions and Landlord's
Attorneys' Fees and Costs $187,000
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