WAREHOUSE LEASE
THIS WAREHOUSE LEASE (herein this "Lease") is made and entered into as of
October 15, 1999, by and between Seneca G&H, L.L.C., a Florida limited liability
company, having an address at 2901 SW 8th Street, Suite 204, Miami, Florida
33135 ("Landlord") and ALADDIN MANUFACTURING CORPORATION, a Delaware
corporation, with its home office located at 160 South Industrial Boulevard,
Calhoun, Georgia 30701 ("Tenant").
ARTICLE I
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DEMISE OF PREMISES
1.1 Premises. For and in consideration of the covenants and agreements
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contained herein and other valuable consideration, Landlord hereby leases to
Tenant the hereinafter defined "Premises" being approximately 186,537 square
feet of gross leasable area, measured from the outside of exterior walls and
from the midpoint of demising walls, ("GLA") in a warehouse building to be
constructed containing approximately 256,592 square feet of GLA (the "Building")
located on a parcel of land located in Pembroke Park, Florida, and more fully
described and/or depicted on Exhibit "A-1" attached hereto and incorporated by
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reference herein ("Land"), together with the non-exclusive right to use the
easements and appurtenances thereto being Common Areas. The portion of the
Building and the Land being leased to Tenant hereunder is sometimes referred to
as the "Premises".) The Premises are depicted as the crosshatched area on
Exhibit "A-2" hereto (the "Site Plan"). The Premises shall include exclusive use
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of approximately 48 loading docks and associated truck aprons in the leased
Premises, parking spaces for Tenant's employees, customers, contractors, agents,
invitees and licensees as depicted in Exhibit "A-3", and non-exclusive rights
of access, ingress and egress over the driveways and other access ways on the
Land and Park. If the Premises constitute the entire Building, then references
to the Building shall be deemed to be the Premises, and Tenant shall have
exclusive use of any and all loading docks, truck wells, compactor pads and
similar appurtenances to the Building and those other areas depicted on Exhibit
"A-2" as being for Tenant's exclusive use, as well as the non-exclusive use of
the Common Areas (hereinafter defined).
ARTICLE II
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APPROVALS; TENANT IMPROVEMENTS; SPECIFICATIONS/ACCESS
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2.1 Approvals. Landlord shall be solely responsible, at Landlord's cost and
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expense, for obtaining and maintaining all permits, approvals, zoning,
variances or other matters (collectively, the "Approvals") that may be required
by the applicable governmental agencies, bureau departments or any other
governmental entity (a "Governmental Authority") for the use and operation of
the Premises for warehouse, light industrial and freight movement use (excluding
occupational licenses and other licenses required for Tenant's particular use of
the Premises). Tenant shall cooperate with Landlord in Landlord's obtaining of
the Approvals. Landlord warrants and represents that such use is allowed by law
as of the date hereof.
2.2 Tenant Improvements. No later than the hereinafter defined Commencement
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Date, Landlord shall complete the work to the Premises described in Exhibit "B"
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hereto ("Landlord's Improvements") and shall deliver the Premises to Tenant on
the Commencement Date with all of the Tenant Improvements, as described therein,
substantially completed and with a permanent or temporary certificate of
occupancy for Tenant's use, operation and occupancy thereof. Landlord warrants
and represents that as of the Commencement Date, the Building will be in good
condition and repair and structurally sound [which condition includes, without
limitation, that the roof will be leak-free and not in need, or in imminent
need, of repair and that the plumbing, electrical, heating, ventilation and
air-conditioning ("HVAC") systems will be in good operating condition and repair
and not in need, or imminent need, of repair]. Landlord shall maintain the
Building and the Land as provided for in Article IX below.
2.3 Premises Specifications/Access. Landlord warrants and represents that
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(i) the Premises have a height clearance of no less than twenty four (24) feet,
(ii) the Premises have truck loading facilities as shown on the Site Plan and
including forty-eight (48) dock high doors, (iii) there is access to the
Premises over the Common Areas (hereinafter defined) to publicly dedicated (and
accepted) right-of-way, (iv) the office shown on the Site Plan shall be heated
and air conditioned pursuant to Landlord's Work, (v) the Premises shall include
men's and women's restrooms and (vi) the warehouse lighting shall be as set
forth in Exhibit "B" or, if not therein set forth, then as
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heretofore agreed to by Landlord and Tenant and shall be in good working order
and repair as of the Commencement Date.
ARTICLE III
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LEASE TERM
3.1 Initial Term. The initial term (herein sometimes referred to as the
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"Initial Term") of this Lease shall commence on the earlier of: (A) one hundred
and eighty (180) days following the latter of (i) the full execution and
delivery of this Lease, (ii) obtaining approval of all necessary plans and
specifications for the intended improvements, including the tenant improvements,
and (iii) obtaining of all necessary permits for the construction of the
intended improvements, including the tenant improvements, or (B) the date on
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which Landlord delivers to Tenant a certificate of substantial completion issued
by Landlord's architect, together with a permanent or temporary certificate of
occupancy confirming that the Premises are substantially complete and available
for occupancy, except only punchlist items that Landlord shall complete within
thirty days thereafter (subject to availability of materials) (the "Commencement
Date"). Notwithstanding anything herein to the contrary, the Commencement Date
shall not be prior to August 1, 2000. The Initial Term shall terminate at the
end of the last day of the tenth (10th) Lease Year.
For purposes of this Lease, the term "Lease Year" shall mean each 12-month
period commencing on the Commencement Date or the anniversary date thereof. If
the Commencement Date does not fall on the first day of a month, the first Lease
Year shall consist of the partial month in which the Commencement Date occurs
and the twelve (12) consecutive months immediately following said partial month.
If for any reason Landlord cannot deliver possession of the Premises to Tenant
on the Commencement Date, Landlord shall not be subject to any liability
therefor, nor shall such failure affect the validity of this Lease, but in such
case Tenant shall not be obligated to pay rent or any other charges hereunder
until Landlord has delivered possession of the Premises to Tenant in accordance
with Section 2.2 above. In the event that Landlord has not delivered the
Premises to Tenant within thirty (30) days after the Commencement Date, the Base
Rent and CAM Costs that would otherwise be due from Tenant will abate for the
number of such delay day(s) after said thirty day period; Landlord shall deliver
the Premises to Tenant as required herein as expeditiously as reasonably
possible.
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Landlord agrees to provide Tenant with at least ten (10) business days advance
written notice of the date on which Landlord anticipates completion of the
Premises and the obtaining of the applicable certificate of occupancy. If the
Premises are ready for occupancy prior to the Commencement Date, then Tenant may
enter upon the Premises to install its trade fixtures, telephone systems,
computer systems and for other purposes allowed by this Lease other than the
operation of its business, subject to all of the terms and conditions hereof,
except that Tenant shall not, until the Commencement Date has occurred, have any
obligation to pay Base Rent or Tenant's Share of CAM Costs or Real Estate Taxes,
as hereinafter provided for.
Tenant shall have two (2) successive year options (each such option being
herein sometimes referred to as an "Extension Option") to extend the term of
this Lease for five (5) Lease Years (each such five (5) year term being herein
sometimes referred to as an "Extension Term"), exercisable by the delivery of
written notice to Landlord by Tenant not less than 9 months prior to the
expiration of the then-current Initial Term or Extension Term, as the case may
be; provided, however, that, if Tenant shall fail to give any such notice within
the aforesaid time limit, Tenant's right to exercise any Extension Option shall
nevertheless continue until thirty (30) days after Landlord shall have given
Tenant notice of Landlord's election to terminate such option, and Tenant may
exercise such option at any time until the expiration of said thirty (30) day
period, but under no circumstances may Tenant exercise any such option during
the last sixty (60) days of the then current Initial Term or Extension Term. If
the Extension Options (or any of them) are duly exercised, the term of this
Lease shall be automatically extended for the applicable Extension Term, upon
all of the same terms, conditions and covenants as set forth in Exhibit "C",
without the requirement of any further instrument to evidence such extension.
3.2 Reversion to Landlord. On or before the last day of the Term, Tenant
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shall peaceably surrender and yield up to Landlord the Premises. Tenant shall
have the express right to remove and to allow any subtenants to remove any of
their trade fixtures and personal property; provided, however, that the Premises
shall be left in the condition existing on the Commencement Date ordinary wear
and tear excepted.
ARTICLE IV
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RENT
4.1 Base Rent. Tenant covenants and agrees to pay Landlord at the above
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referenced address, or such other place as Landlord shall designate in writing,
Base Rent and all Florida Sales Taxes due under this Lease, in advance, without
demand, set off or deduction, except as expressly provided for herein, in equal
monthly installments, on the first day of each and every calendar month during
the Term from and after the Commencement Date, as is set forth on the Rent
Schedule attached as Exhibit "C" hereto. The parties acknowledge and agree that
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the initial Base Rent is based on five dollars and twenty cents ($5.20) per
square foot of GLA per year; the Base Rent, as adjusted during the Initial Term,
is set forth in Exhibit "C" hereto. Within the first ninety (90) days after the
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Commencement Date, Tenant may cause the Premises to be measured by a qualified
engineer or architect acceptable to Landlord and, if the GLA of the Premises as
properly calculated by such engineer or architect is less than 186,537 square
feet, then the Base Rent shall be adjusted accordingly. If Tenant does not cause
the Premises to be measured, pursuant to the foregoing, within the first ninety
90 days after the Commencement Date, then the Premises shall be deemed to
contain 186,537 square feet of GLA. Landlord covenants and agrees to make good
faith efforts to cause the Premises to contain 186,537 square feet of GLA.
4.2 Late Charges. If Tenant is delinquent in any monthly installment of
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Base Rent, Tenant shall pay to Landlord on demand a late charge equal to 5
percent of such delinquent sum. The provision for such late charge shall be in
addition to all of Landlord's other rights and remedies hereunder or at law and
shall not be construed as a penalty.
ARTICLE V
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TAXES
5.1 Real Estate Taxes
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(a) During each month of the Initial Term and any Extension Term(s), on
the same date that Base Rent is due, Tenant shall pay Landlord an amount equal
to 1/12 of the annual cost, as estimated by Landlord from time to time, of
Tenant's Share of real estate taxes and assessments for betterments and
improvements that are levied or assessed by any lawful authority
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on the Premises ("Real Estate Taxes"). Landlord shall pay all Real Estate Taxes
that are levied or assessed by any lawful authority on the Premises and
Landlord's other real property within the same tax parcel prior to the date same
become overdue. Landlord shall take the maximum benefit of any law allowing Real
Estate Taxes to be paid in installments, and in such event only the amount
actually paid by Landlord during the applicable tax year shall be included in
Real Estate Taxes for purposes of this Article. Landlord agrees to pay all Real
Estate Taxes prior to the last date that the same may be paid without penalty or
interest, or if a discount shall be available for early payment, prior to the
last day that such discount is available. Without cost to Tenant, Landlord shall
bear all interest, penalties, late charges and lost discount amounts incurred as
a result of Landlord's failure to timely pay any installment of Real Estate
Taxes. The Real Estate Taxes for any tax year shall mean such amounts as shall
be finally determined to be the Real Estate Taxes payable during such tax year
less any abatements, refunds or rebates made thereof. The parties shall make
appropriate adjustments to previous amounts received by Landlord from Tenant on
account of any abatements, refunds, rebates, or increases in Real Estate Taxes,
immediately following the determination of the amount of such abatements,
refunds, rebates, or increases. Prior to the Commencement Date, Landlord shall
pay all Real Estate Taxes before they become overdue.
(b) Real Estate Taxes to be paid by Tenant shall not include the following:
(i) income, intangible, franchise, capital stock, estate or inheritance taxes or
taxes substituted for or in lieu of the foregoing exclusions; (ii) any taxes or
any assessment for special improvements to the Land or the Building, including
but not limited to the widening of exterior roads, the installation of or hook
up to sewer lines, sanitary and storm drainage systems and other utility lines
and installations, provided that such assessment is made prior to the date
hereof and do not benefit Tenant; (iii) taxes gross receipts or revenues of
Landlord from the Premises or other portions of the Building, except for the
Florida Rent Sales Tax (which shall be paid by Tenant); or (iv) impact fees.
5.2 Proration of Taxes
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(a) Tenant shall pay Landlord, within fifteen (15) days following
Landlord's written request and invoicing, for any amount by which the Tenant's
Share of Real Estate Taxes actually
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exceeds the sum previously paid by Tenant to Landlord for the payment of such
Real Estate Taxes. Said invoice shall be accompanied by a computation of the
amount payable.
(b) If the term of this Lease shall terminate on any date other than the
last day of a tax fiscal period, the amount payable by Tenant during the tax
fiscal period in which such termination occurs shall be prorated on the basis
which the number of days from the commencement of said tax fiscal period to and
including said termination date bears to the number of days in the fiscal
period. A similar proration shall be made for the tax fiscal period in which the
Commencement Date occurs.
(c) As used in this Article V, the term Tenant's "Share" shall mean a
fraction, the numerator of which shall be the floor area of the Premises and the
denominator of which shall be equal to the aggregate of the floor area of all
buildings on the tax parcel on which the Building is located. Tenant shall pay
the estimated Tenant's Share of Real Estate Taxes monthly, together with its
payments of estimate CAM Costs (hereinafter defined), with adjustments to be
made promptly after actual Real Estate Tax Costs are known.
(d) The GLA of the Building will be approximately 256,592 square feet and
(B) the GLA of the Park will be approximately 1,520,000 square feet, therefore,
Tenant's Share of the Building will be approximately is 72.70% and Tenant's
Share of the Park will be approximately 12.27%.
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ARTICLE VI
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COMMON AREAS
6.1 Definition. "Common Areas" (or "Common Area") shall mean all
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exterior/outdoor areas, space, installations and equipment on the Land [and
elsewhere in the business park (the "Park") of which the Land is a part, if the
Land is part of a larger business park] for the common use and benefit of the
tenants of the Park, their employees, agents, licensees, customers and other
invitees, including without limitation parking areas, exits, entrances, access
roads, driveways, sidewalks, retaining walls, loading platforms and ramps, and
landscaped areas, as such Common Areas are depicted in the Site Plan (which Site
Plan may be amended by Landlord from time to time). The parties acknowledge
that, at this time, there are no indoor common areas on the Land or elsewhere in
the Park. If the Land is not part of a larger business park, then the term
"Park" shall refer only to the Land. Landlord shall be responsible, at
Landlord's sole cost and expense, be responsible for the initial construction
and installation of the Common Areas in good and workmanlike manner and in
compliance with all governmental requirements.
6.2 Use of Common Areas. Landlord hereby grants to Tenant, its licensees,
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subtenants, concessionaires, successors and assigns, and its and their
employees, agents, licensees, customers, and invitees the non-exclusive right
and privilege to use the Common Areas during the term hereof and any extensions
of same, continuously and without interruption, in common with other tenants of
the Park. Landlord shall make no material change to the Common Areas that would
have a materially adverse impact on Tenant's operations.
6.3 Parking. Landlord shall maintain on the Land at least the minimum
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number of parking spaces required by applicable governmental rules, regulations
and ordinances without variance (other than variances granted prior to the date
hereof). Landlord shall provide all parking without the imposition of any
parking charge.
6.4 Operation and Maintenance. Landlord, as a component of CAM Costs of
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which Tenant is responsible for Tenant's Share, agrees to be responsible for the
operation, maintenance, repair, and associated administration of the Common Area
in good
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condition and repair and in a clean condition, which responsibilities shall
include but not be limited to sweeping of the parking area and sidewalks;
arrangements for the limited removal of trash generated by the offices within
the Building and trash and obstructions caused by inclement weather, lighting of
the Common Area; retention of security personnel to the extent the Landlord and
Tenant reasonably agree such to be appropriate; limited fire protection; paving
of the parking area; and repair and maintenance of all Common Area improvements.
6.5 CAM Costs. Tenant shall be responsible to pay its CAM Share of all
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costs incurred by Landlord in operating and maintaining the Premises, the
Building, and the Common Area, which costs shall include, without limitation
those relating to management, administration, insurance, real estate taxes and
assessments, maintenance expenditures, etc. ("CAM Costs"). CAM Costs shall not
include any Capital Expenditure, except for the amortized portion of any Capital
Expenditure reasonably made for the general benefit of all tenants of the
Building, which amortization shall be made over the estimated actual useful life
of the improvement in question. As used herein, the term "Capital Expenditure"
shall mean those expenditures which in accordance with generally accepted
accounting principles are capitalized as opposed to being accounted for as
expenses. As used in this Article VI, the term "CAM Share" shall mean a
fraction, the numerator of which shall be the number of square feet of GLA
(which shall be measured from the outside of exterior walls and from the
midpoint of demising walls) in the Premises and the denominator of which shall
be equal to the aggregate of the GLA of all buildings then existing in the Park;
Tenant's CAM Share shall be published to Tenant periodically. CAM Costs shall be
billed monthly. Estimated CAM Costs for the first Lease Year shall be based on
Landlord's good faith estimate that Tenant's CAM Share of CAM Costs, together
with Tenant's Share of Real Estate Taxes, will total $1.20 per square foot of
GLA for the entire first Lease Year. Landlord has calculated said estimate in
good faith.
In addition to the foregoing, CAM Costs shall not include (i) expenses
incurred in leasing space, such as legal expenses, brokerage commissions or
advertising or promotional expenses, (ii) interest and amortization under
mortgages or any other secured or unsecured loan payable by Landlord, (iii)
expenses separately reimbursed by any other tenants of the Park
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(excluding reimbursements to Landlord for such tenants' prorata share of CAM
Costs), (iv) financing and refinancing costs, including fees paid by Landlord to
obtain financing or refinancing such as origination fees and brokerage
commissions, (v) non-cash depreciation, (vi) costs incurred in connection with
the enforcement of leases, including attorneys' fees or other costs and expenses
incurred in connection with summary proceedings to dispossess any other tenant
in the Park, (vii) any expenses associated with any special requirements of a
particular tenant other than Tenant, (viii) any costs attributable to the
original design or construction of the Premises, Building or Park (or any
portion thereof), (ix) any costs associated with Y2K computer (and related)
problems, (x) any Improvement except for a hereinafter defined Permitted
Expenditure, (xi) any costs, fines, interest, penalties, legal fees or other
expenses associated with violations by Landlord of any law, rule or other
governmental requirement or with respect to late payment for utilities, taxes or
any other service or product (except if caused by Tenant) or (xii) the cost of
maintaining, repairing or replacing the roof, foundation and/or structural walls
of the Premises (unless same have been damaged by Tenant's actions or
inactions), Building or any other Building in the Park. For the purposes of this
Lease, a "Permitted Expenditure" shall be Improvements made to the Building or
lift station which are (a) primarily for the purpose of reducing operating
expense costs or otherwise improving the operating efficiency of the Building or
(b) required to comply with (A) any laws, rules or regulations of any
governmental authority newly enacted after the date hereof or (B) any changes
after the date hereof in the interpretation or enforcement of the existing laws,
rules or regulations of any governmental authority. The cost of such
Improvements shall be amortized over a period of not less than the useful life
thereof and not more than ten (10) years and shall, at Landlord's option,
include interest at the lesser of (yy) ten percent (10%) per annum or (zz) two
percent over the prime rate of interest then in effect for NationsBank, N.A. The
portion of the annual amortized cost to be included in CAM Costs in any calendar
year with respect to a capital improvement which is intended to reduce expenses
or improve the operating efficiency of the Building shall equal such annual
amortized cost.
At least sixty (60) days prior to the commencement of the second Lease Year
and every Lease Year thereafter, Landlord shall deliver to Tenant a written
estimate of Landlord's
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projected CAM Costs for the forthcoming Lease Year. Within ninety (90) days
after the expiration of each calendar year Landlord shall furnish Tenant a
certified statement showing the CAM Costs broken down in reasonable detail,
showing the items included therein, and the manner of the computation of
Tenant's CAM Share for such payment and the payments made by Tenant with respect
to such year. If Tenant's aggregate payments for such costs with respect to such
year are greater than Tenant's CAM Share of such costs, Tenant shall receive a
credit for the excess against Base Rent and other payments from Tenant next
becoming due to Landlord (or refunded to Tenant, if the Term has expired); if
said payments are less than said CAM Share, Tenant shall pay to Landlord the
difference within thirty (30) days thereafter.
Landlord shall retain its records relating to the CAM Costs at Landlord's
principal office or that of the management company managing the Park, and upon
reasonable prior notice to Landlord and the management company, Tenant shall
have the right to inspect all of Landlord's records relating to such costs.
Appropriate adjustments shall be made for errors in the computation of such
costs revealed by such audit or inspection. If any audit by Tenant indicates an
overcharge in the amount of Tenant's CAM Share by more than five percent (5%),
the reasonable cost of such audit shall be paid on demand by Landlord to Tenant;
otherwise the expenses of Tenant's audit shall be borne by Tenant and Tenant
must reimburse Landlord for the costs charged by the management company with
respect to such audit. Landlord shall retain its CAM Costs records for at least
thirty-six (36) months after the expiration of each calendar year.
ARTICLE VII
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UTILITIES
7.1 Utilities. Landlord shall design the Building pursuant to the plans and
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specifications such that the applicable utility companies may provide
electricity, gas, telephone, sewerage and other utilities to the Premises, in
sufficient quantities to serve Tenant's needs for the use contemplated
hereunder. Landlord shall install, at Landlord's expense, all utility meters
necessary for measuring the consumption of utilities serving the Premises and
Tenant shall pay the applicable utility companies or governmental agencies for
all such utilities consumed on the Premises.
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ARTICLE VIII
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USE AND ASSIGNMENT
8.1 Use. The Premises may be used for warehousing, distribution, light
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industrial uses and uses incidental thereto and, with Landlord's consent (which
shall not be unreasonably withheld or delayed), any other lawful purpose.
8.2 Assignment and Subletting. Tenant shall have the right to assign this
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Lease, or to sublet all or any portion of the Premises to any party controlling,
controlled by or under common control with Tenant, any entity with which Tenant
is merged or consolidated or to any party that purchases all or substantially
all of Tenant's assets in the geographical region where the Premises are
located, provided that subsequent to such subletting or assignment Tenant
remains liable for the payment and performance of Tenant's obligations under
this Lease and, in the case of any assignment, the assignee assumes Tenant's
obligations under this Lease. Any other assignment or subletting shall require
Landlord's prior written consent, which consent shall not be unreasonably
withheld or delayed. Notwithstanding anything herein to the contrary, Tenant
shall not assign or sublet any, or all, of the Premises to any tenant (or
affiliate thereof) leasing space in the Park or to any entity (or affiliate
thereof) with which Landlord has discussed the prospect of leasing space in the
Park, unless Tenant obtains Landlord's prior written consent which shall be at
Landlord's sole and absolute discretion. No subletting or assignment shall
(i) release Tenant from liability hereunder or (ii) release the guarantor of
Tenant's performance under this Lease from liability under the applicable
guaranty agreement.
ARTICLE IX
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MAINTENANCE; ALTERATIONS; FIXTURES
9.1 Landlord's Repairs. In addition to Landlord's obligations as set forth
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in Articles II and VI hereof, Landlord shall maintain in good repair the walls,
foundations, roof, gutters, downspouts, exterior and all structural portions of
the Building, and all plumbing, electrical, sewage and heating, ventilating and
air conditioning ("HVAC") lines and ducts in or passing through the Premises
that serve other tenants in the Building or that are located outside the
Premises but that serve the Premises. Landlord shall in addition make such
repairs,
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replacements or modifications of building structure or component systems as are
required by law as of the Commencement Date, regulation or ordinance pertaining
to the Premises which are not due or attributable to Tenant's specific manner
of operating in the Premises. In making any repairs hereunder, Landlord shall
not unreasonably interfere with Tenant's normal operations in the Premises.
9.2 Tenant's Repairs. Subject to the provisions of Section 9.1
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hereinabove and Landlord's warranty and representation that the Premises and all
the systems therein will be in good condition and repair as of the Commencement
Date, Tenant shall be responsible for interior, non-structural repairs to the
Premises including, without limitation, the repair of component systems serving
only the Premises, entries, doors, windows, fire sprinklers, fire protection
systems, etc., unless any such repairs or replacements are necessitated by
Landlord's failure to promptly perform its obligations hereunder, by damage
caused by the wrongful acts or negligence of Landlord, its employees, agents and
contractors, or by damage by fire or other casualty for which Landlord is
responsible for repairing pursuant to this Lease. In light of the substantial
costs of replacing any portions of the Premises' HVAC system, the parties hereby
agree that in the event such system requires any replacement during the last
five (5) years of the Initial Term, Landlord shall reimburse Tenant on the
expiration or earlier termination of this Lease for the unamortized portion of
such expense based on the date of installation of such equipment and the useful
life of such equipment, provided that such equipment is not user specific or
that such equipment is not replaced as a result of damage caused by Tenant's
actions or inactions.
9.3 Alterations. Tenant shall have the right to make such alterations to
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the Premises as Tenant shall from time to time deem necessary for the operation
of Tenant's business provided that (i) Tenant shall first obtain Landlord's
prior written consent, (ii) Tenant shall perform such work at Tenant's sole
expense, (iii) such alterations shall not impair the structural integrity or
diminish the value of the Premises, and (iv) Tenant provides Landlord with AS
Built plans for such alterations and agrees to remove same, at Landlord's
request, upon expiration or termination of this Lease. Landlord shall execute
all necessary instruments required to obtain licenses and permits to make such
alterations from the applicable governmental authorities. All
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alterations, additions and improvements made by Tenant to the Premises
("betterments and improvements") remaining in the Premises after the expiration
or other termination hereof shall become the property of Landlord upon the
termination of this Lease without any compensation to Tenant and shall be
surrendered at such time as a part of the Premises.
9.4 Liens. Each party hereto shall promptly pay when due the entire cost
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of all work done by it to the Premises and shall keep the Premises free of liens
for labor or materials. Should mechanics', materialmen's or other liens be filed
against the Premises by reason of the acts of either party hereto, such party
shall cause the lien to be canceled and discharged of record by bond or
otherwise within thirty (30) days of receiving actual notice of such lien.
9.5 Trade Fixtures. Any trade fixtures, furniture and equipment that
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Tenant installs in the Premises at its expense prior to or during the Term
hereof shall remain Tenant's property, and may be removed by Tenant, as long as
Tenant repairs any damage to the Premises caused by such removal and Tenant is
not in default under this Lease.
ARTICLE X
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INSURANCE
10.1 Landlord's Insurance. Landlord shall at all times maintain general
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commercial liability insurance covering the Park, including but not limited to
the Common Areas thereof against claims for personal injury and damage to
property naming Tenant as an additional insured under a policy, with minimum
limits of $1,000,000 for personal injury or death per person, $5,000,000 per
occurrence and not less than $500,000 for property damage or a single limit
policy in the minimum amount of $5,000,000. In addition, Landlord shall carry
and maintain all-risk (Special Form) property insurance, covering the Building
for the full replacement cost thereof. Landlord shall also maintain Workers'
Compensation or similar insurance to the extent required by law. Throughout
Landlord's construction and thereafter throughout the term of this Lease,
Landlord shall maintain liability insurance in amounts reasonably acceptable to
Tenant.
10.2 Tenant's Insurance. Tenant shall maintain a policy of general
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commercial liability covering the Premises with minimum
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limits of $1,000,000 for personal injury or death per person, $5,000,000 per
occurrence and not less than $500,000 for property damage or a single limit
policy in the minimum amount of $5,000,000. Tenant shall keep in force Workers'
Compensation or similar insurance to the extent required by law. Notwithstanding
anything to the contrary contained herein, as long as Tenant's net worth (or the
net worth of any party guaranteeing Tenant's obligations under this Section
10.2) is at least $100,000,000.00, Tenant shall have the right to self insure
part or all of any of the aforesaid insurance coverages in its sole discretion.
In the event that Tenant elects to self insure all or any part of any risk that
would be insured under the policies and limits described above, and an event
occurs where insurance proceeds would have been available but for the election
to self insure, Tenant shall make funds available to the same extent that they
would have been available had such insurance policy been carried by a third
party insurance company; in addition, Tenant shall indemnify Landlord and hold
Landlord harmless from any losses attributed to Tenant's failure to timely make
all such funds available. Notwithstanding the foregoing provisions permitting
Tenant's self insurance, in the event that, at any time, Landlord's lender(s)
and/or the Park insurance provider(s) require that Tenant obtain the requisite
insurance from a third party insurance company, Tenant shall do so.
10.3 Insurance Certificates. All of the foregoing insurance policies
----------------------
referred to or described in Sections 10.1 and 10.2 above shall be written with
companies licensed to do business in the state in which the Premises are located
with a financial rating of VIII or better and a policyholder's rating of A- or
better in the latest edition of Best's Rating Guide on Property and Casualty
--------------------------------------------
Insurance Companies and shall provide that the other party hereto shall be given
-------------------
a minimum of ten (10) days' written notice by any such insurance company prior
to the cancellation, termination or alteration of the terms or limits of such
coverage. Each party shall deliver to the other party hereto the foregoing
insurance policies or certificates thereof at or prior to the date that same are
required to be in effect and evidence of all renewals or replacements of same
not less than ten (10) days prior to the expiration date of such policies. All
such policies may be maintained under a blanket insurance policy of Landlord or
Tenant.
17
10.4 Mutual Release and Waiver of Subrogation. Landlord and Tenant hereby
----------------------------------------
release each other and anyone claiming through or under the other by way of
subrogation or otherwise from any and all liability for any loss of or damage to
property, whether caused by the negligence or fault of the other party to the
extent of the property insurance required to be carried by the waiving party
hereunder. In addition, Landlord and Tenant shall cause each insurance policy
carried by them insuring any of the improvements on the Land or the contents
thereof, to be written to provide that the insurer waives all rights of recovery
by way of subrogation against the other party hereto (and any mortgagee of such
party) in connection with any loss or damage covered by the policy. If no
responsible and qualified insurer will provide a waiver of subrogation without
extra charge or premium, then the insuring party shall inform the other party
that such additional charge or premium is required and said other party may
elect to (a) pay such extra charge or premium or (b) waive the requirement for
the waiver of subrogation (in which case the waivers of claim set forth herein
shall be ineffective to the extent that same would void, invalidate or otherwise
vitiate any insurance coverage). In case such waiver cannot be obtained, even at
an additional cost, then item (b) in the immediately preceding sentence shall
become effective. Any liability insurance coverage carried by either party
hereto shall name the other party and, upon request, any lender of such other
party as additional insured thereunder and each party hereby waives claims
arising from the other party's negligence to the extent of such insurance
coverage.
10.5 Mutual Indemnification. Tenant and Landlord agree to indemnify and
----------------------
hold each other harmless from and against any and all claims, damages or causes
of action for damages brought on account of injury to any person or persons or
property, or loss of life, arising out of (i) the failure to comply with its
obligations hereunder by Landlord or Tenant, respectively, or (ii) the use,
operation or maintenance of the Premises by Tenant or by the use, operation or
maintenance of the remainder of the Building and other improvements on the Land
by Landlord, except for matters arising from the gross negligence or willful
misconduct of the party seeking indemnification. Notwithstanding any other
provisions set forth herein, the parties hereby agree that in the event of any
damage to a party, including all personal and property damages and losses to a
party's employees or invitees, each party shall resort to any and all insurance
coverage available prior to asserting any
18
claim or demand against the other party or its assets. No insurer is meant to be
a third party or other beneficiary of any provision contained in this Lease.
ARTICLE XI
----------
DAMAGE OR DESTRUCTION
11.1 Damage and Destruction. Except as otherwise provided herein, if the
----------------------
Premises are damaged by fire or other casualty, the damage shall be promptly
repaired by Landlord to the extent of the insurance proceeds available therefor,
plus any deductible maintained with respect to Landlord's property insurance.
Until repairs to the Premises are completed by Landlord, rent and all other
amounts payable by Tenant hereunder shall be abated in proportion to the part of
the Premises, if any, which is unusable by Tenant in the conduct of its
business. If: (a) the Premises is damaged to the extent of more than fifty
percent (50%) of the replacement cost thereof; or (b) the Park or the Building
is damaged by fire or other insured casualty to the extent of thirty-five
percent (35%) or more of the replacement cost thereof; or (c) any damage to the
Premises cannot be repaired within one hundred twenty (120) days of the date of
such damage; or (d) the Premises is materially damaged or destroyed during the
last eighteen (18) months of the term hereof; then Landlord may terminate this
Lease by written notice to Tenant given within thirty (30) days after the
occurrence of the casualty, time being of the essence, subject to Tenant's right
to exercise an Extension Option as to item (d). Landlord's repair of the
Premises shall not include any of Tenant's trade fixtures or other personal
property or any of Tenant's betterments or improvements to the Premises.
If (a) the Premises is materially damaged or destroyed during the last
eighteen (18) months of the term hereof or (b) any damage to the Premises cannot
be repaired within one hundred twenty (120) days of the date of such damage;
then Landlord may terminate this Lease by written notice to Tenant, given within
thirty (30) days after the occurrence of the casualty, unless Tenant exercises
an Extension Option(s) the term of which is no less than 80% of the economic
life of the tenant improvements to be constructed. In addition, in the event
that the Premises is
19
materially damaged or destroyed during the last eighteen (18) months of the term
hereof and such damage cannot be repaired within one hundred twenty (120) days
of the date of such damage; then Tenant may terminate this Lease by written
notice to Landlord, given within thirty (30) days after the occurrence of the
casualty, provided, that (i) upon expiration of said one hundred twenty day
period and during the delay period, Landlord is unable to provide Tenant with
additional temporary space in the Park of approximately the same size as the
portion of the Premises that are being restored and (ii) Landlord is unable to
complete the restoration within a reasonable period of time following said one
hundred twenty day period.
11.3 Termination. In the event of any termination of this Lease as the
-----------
result of the provisions of this ARTICLE XI, the parties, effective as of such
termination, shall be released, each to the other, from all liability and
obligations thereafter arising under this Lease.
ARTICLE XII
-----------
EMINENT DOMAIN
12.1 Condemnation. If after the execution of this Lease and prior to the
------------
expiration of the term hereof, the whole (or substantially the whole) of the
Premises shall be taken under power of eminent domain by any public or private
authority, or conveyed by Landlord to said authority in lieu of such taking,
then this Lease and the term hereof shall cease and terminate as of the date of
such taking, subject, however, to the right of Tenant, at its election, to
continue to occupy the Premises, subject to the terms and provisions of this
Lease, for all or such part, as Tenant may determine, of the period between the
date of such taking and the date when possession of the Premises shall be taken
by the taking authority and any unearned rent or other charges, if any, paid in
advance, shall be refunded to Tenant.
12.2 Termination Right. If, after the execution of this Lease and prior to
-----------------
the expiration of the term hereof, any taking under the power of eminent domain
by a public or private authority or any conveyance by Landlord in lieu thereof,
shall result in a taking of more than 20% of the total square footage of the
Premises and Landlord is unable to deliver alternate space within the Park
similar in size to the portion of the Premises taken, then Tenant may, at its
election, terminate this
20
Lease by giving Landlord notice of the exercise of Tenant's election within
ninety (90) days after the date when possession of the Premises shall be taken
by the appropriating authority, time being of the essence
12.3 Rent Abatement. In the event of a taking in respect of which Tenant
--------------
shall not have the right to elect to terminate this Lease or, having such right,
shall not elect to terminate this Lease, this Lease and the term thereof shall
continue in full force and effect and Tenant shall be entitled to a
proportionate reduction of the rent and any other charges payable by Tenant
hereunder, based on the square footage of the Premises taken under the power of
eminent and the total square footage of the Premises prior to such taking.
12.4 Award. All compensation awarded for any taking, whether for the whole
-----
or a portion of the Premises, shall belong to Landlord; provided that Tenant
shall be entitled to any award made, whether to Landlord or to Tenant, for the
unamortized cost of Tenant's betterments and improvements installed at Tenant's
Cost, moving expenses and the value of Tenant's trade fixtures and further
provided that Tenant may apply for and receive an award for the loss of Tenant's
leasehold estate so long as such award in no way diminishes any award to
Landlord or to any mortgagee of Landlord with respect to Landlord's remainder.
12.5 Termination. In the event of any termination of this Lease as the
-----------
result of the provisions of this ARTICLE XII, the parties, effective as of such
termination, shall be released, each to the other, from all liability and
obligations thereafter arising under this Lease.
ARTICLE XIII
------------
ENVIRONMENTAL MATTERS
13.1 Environmental Remediation. To the best of Landlord's knowledge,
-------------------------
Landlord shall deliver the Premises to Tenant on the Commencement Date free of
all Hazardous Substances (hereinafter defined) to the extent necessary to be in
compliance with all environmental and other laws related to health and safety
and so as to allow Tenant to operate in the Premises for its intended use
hereunder without impairment, interruption, interference, liability or
additional cost or expense with respect to any Hazardous Substance.
21
"Hazardous Substances" for purposes of this Lease shall be interpreted
broadly to include, but not be limited to, any material or substance that is
defined or classified under federal, state, or local laws as: (a) a "hazardous
substance" pursuant to section 101 of the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. (S)1321(14), section 311 of the
Federal Water Pollution Control Act, 33 U.S.C. (S)1321, as now or hereafter
amended; (b) a "hazardous waste" pursuant to section 1004 or section 3001 of the
Resource Conservation and Recovery Act, 42 U.S.C. (S)6903, 6921, as now or
hereafter amended; (c) a toxic pollutant under section 307(a)(1) of the Federal
Water Pollution Control Act, 33 U.S.C. (S)1317(a)(1); (d) a "hazardous air
pollutant" under section 112 of the Clean Air Act, 42 U.S.C. (S)7412, as now or
hereafter amended; (e) a "hazardous material" under the Hazardous Materials
Transportation Uniform Safety Act of 1990, 49 U.S.C. App. (S)1802(4), as now or
hereafter amended; (f) toxic or hazardous pursuant to regulations promulgated
now or hereafter under the aforementioned laws; or (g) presenting a risk to
human health or the environment under other applicable federal, state or local
laws, ordinances, or regulations, as now or as may be passed or promulgated in
the future (all of the foregoing laws, ordinances, regulations and other
governmental strictures and guidelines pertaining to the environment, health and
safety being herein sometimes referred to as the "Environmental Requirements").
"Hazardous Substances" specifically include, but are not limited to, asbestos,
polychlorinated biphenyls ("PCBs"), radioactive substances, petroleum and
petroleum-based derivatives, hydrocarbons and urea formaldehyde.
13.2 Tenant Covenant and Indemnity. Tenant shall not cause or permit the
-----------------------------
storage, use, escape, disposal or release of Hazardous Substances in any manner
not in compliance with the Environmental Requirements; provided, however, that
nothing herein shall prevent Hazardous Substances to be brought onto the
Premises in the ordinary course of Tenant's business, as long as such presence
is in compliance with the Environmental Requirements. Tenant shall indemnify and
hold harmless Landlord against and from any liability, claim of liability,
claims, suits, costs, expenses, causes of action, personal liability and
property damage (including without limitation Landlord's attorney's fees)
arising out of a breach by Tenant of its covenant in the preceding sentence. The
foregoing covenants and indemnities shall survive the expiration or earlier
termination of this Lease; provided, however, that Tenant shall not be
22
required to indemnify Landlord from any matter arising from Landlord's gross
negligence or willful misconduct.
13.3 Landlord Covenant and Indemnity. Landlord shall not cause or permit
-------------------------------
the storage, use, escape, disposal or release of Hazardous Substances in, on or
with respect to the Land in any manner not in compliance with the Environmental
Requirements provided, however, that nothing herein shall prevent Hazardous
Substances to be brought onto the Land in the ordinary course of Landlord's
business or the businesses of Landlord's other Tenants, as long as such presence
is in compliance with the Environmental Requirements. Landlord shall indemnify
and hold Tenant harmless against and from any liability, claim of liability,
claims, suits, costs, expenses, causes of action, personal liability and
property damage (including without limitation reasonable attorney's fees)
arising out of a breach by Landlord of its covenant in the preceding sentence.
Further, Landlord shall indemnify and hold Tenant harmless against and from any
liability, claim of liability, claims, suits, costs, expenses, causes of action,
personal liability and property damage (including without limitation reasonable
attorney's fees) arising out of a breach by Landlord of its representations,
warranties and covenants in Section 13.1 above. The foregoing covenants and
indemnities in this Section 13.3 shall survive the expiration or earlier
termination of this Lease; provided, however, that Landlord shall not be
required to indemnify Tenant from any matter arising from Tenant's gross
negligence or willful misconduct. Landlord shall not be liable to Tenant under
this Section 13.3 with respect to the acts of other tenants of Landlord, unless
same results from Landlord's gross negligence or willful misconduct; provided,
however, that if any Hazardous Substances brought onto the Land by such other
tenants materially adversely affects the ability to use the Premises for the use
contemplated hereunder, then Tenant may terminate this Lease by written notice
to Landlord, unless Landlord agrees to promptly abate such interference.
ARTICLE XIV
-----------
DEFAULT
14.1 Remedies Upon Tenant's Default. In the event Tenant shall at any time
------------------------------
be in default in the payment of rent or other charges herein required to be paid
by Tenant or in the observance or performance of any of the other covenants and
23
agreements required to be performed and observed by Tenant hereunder and any
such default shall continue for a period of ten (10) days following the date
such payment was due for monetary obligations and thirty (30) days after written
notice to Tenant for all other obligations (or if such default is incapable of
being cured in a reasonable manner within thirty (30) days then if Tenant has
not commenced to cure the same within said thirty (30) day period and thereafter
diligently prosecutes the same to completion), then Landlord shall be entitled
at its election, to exercise concurrently or successively, any one or more of
the following rights:
(a) to bring suit for the collection of the rent or other amounts for which
Tenant may be in default, or for the performance of any other covenant or
agreement devolving upon Tenant, all without entering into possession or
terminating this Lease;
(b) to re-enter the Premises with process of law and take possession
thereof, without thereby terminating this Lease, and thereupon Landlord may
expel all persons and remove all property therefrom, without becoming liable
to prosecution therefor, and relet the Premises and receive the rent
therefrom, applying the same first to the payment of the reasonable expenses
of such re-entry and the reasonable cost of such reletting, and then to the
payment of the monthly rental accruing hereunder, the balance, if any, to be
paid to Tenant. Tenant shall remain liable for any deficiency after such
application.
(c) to terminate this Lease, re-enter the Premises and take possession
thereof. In the event Landlord shall elect to terminate this Lease, as
aforesaid, all rights and obligations of Landlord, and of any permitted
successors or assigns, shall cease and terminate, except that Landlord shall
have and retain full right to sue for and collect all rents and other amounts
for the payment of which Tenant shall then be in default, and all damages to
Landlord by reason of any such breach, and Tenant shall surrender and deliver
up the Premises to Landlord and upon any default by Tenant in so doing,
Landlord shall have the right to recover possession by summary proceedings or
otherwise and to apply for the appointment of a receiver and for other
ancillary relief in such action, and Landlord shall again
24
have and enjoy the Premises, fully and completely, as if this Lease had never
been made.
In addition to Landlord's other remedies hereunder, if Tenant defaults in
the performance of any obligation imposed on it by this Lease and does not cure
such default within twenty (20) days after written notice from Landlord
specifying the default (or does not within said period commence and diligently
proceed to cure such default), Landlord, without waiver of or prejudice to any
other right or remedy it may have, shall have the right, at any time thereafter,
to cure such default for the account of the Tenant, and Tenant shall reimburse
Landlord upon invoice for any amount paid and any expense or contractual
liability so incurred. In the event of emergencies, or where necessary to
prevent injury to persons or damage to property or to mitigate damages, Landlord
may cure a default by Tenant before the expiration of the waiting period, but
after giving such written or oral notice to Tenant as is practical under all of
the circumstances. If Tenant fails to reimburse Landlord within ten (10) days
after receipt of invoice, then Tenant shall also pay to Landlord interest
thereon at the hereinafter defined Default Rate from date of disbursement.
14.2 Remedies Upon Landlord's Default. In the event that Landlord shall at
--------------------------------
any time be in default in the observance or performance of any of the covenants
and agreements required to be performed and observed by Landlord hereunder and
any such default shall continue for a period of thirty (30) calendar days after
written notice to Landlord (or if such default is incapable of being cured in a
reasonable manner within thirty (30) calendar days then if Landlord has not
commenced to cure the same within said thirty (30) calendar day period and
thereafter diligently prosecutes the same to completion) and Landlord shall not
thereafter cure such default, Tenant shall be entitled at its election, to bring
suit for the collection of any amounts for which Landlord may be in default, or
for the performance of any other covenant or agreement devolving upon Landlord,
in addition to all remedies otherwise provided in this Lease and otherwise
available in law or equity under the laws of the United States or the State or
Commonwealth in which the Premises are located.
In addition to all of Tenant's other remedies hereunder, if Landlord
defaults in the performance of any obligation imposed on it by this Lease
pertaining exclusively to the Premises and
25
not to any other part of the Park, and does not cure such default within twenty
(20) days after written notice from Tenant specifying the default (or does not
within said period commence and diligently proceed to cure such default),
Tenant, without waiver of or prejudice to any other right or remedy it may have,
shall have the right, at any time thereafter, to cure such default for the
account of the Landlord, and Landlord shall reimburse Tenant upon invoice for
any amount paid and any expense or contractual liability so incurred. If
Landlord fails to reimburse Tenant within ten (10) days after invoice, then
Tenant shall have the right to offset the amount due thereunder, together with
interest at the Default Rate (as defined in Section 14.3 hereinbelow) from the
date of disbursement against all rent and other charges due from Tenant to
Landlord under this Lease until Tenant has been completely reimbursed for its
expenses. In the event of emergencies, or where necessary to prevent injury to
persons or damage to property or to mitigate damages, Tenant may cure a default
by Landlord before the expiration of the waiting period, but after giving such
written or oral notice to Landlord as is practical under all of the
circumstances.
14.3 Attorneys' Fees; Remedies. In the event that either Landlord or
-------------------------
Tenant commences any suit for the collection of any amounts for which the other
may be in default or for the performance of any other covenant or agreement
hereunder, the other party shall pay all reasonable attorneys' fees and other
expenses incurred by the prevailing party enforcing such obligations and/or
collecting such amounts, plus interest thereon at the highest legal rate not to
exceed eighteen (18%) percent per annum (the "Default Rate"). All remedies of
Landlord and/or Tenant herein created or remedies otherwise existing at law or
equity are cumulative and the exercise of one or more rights or remedies shall
not be taken to exclude or waive the right to the exercise of any other. All
such rights and remedies may be exercised and enforced concurrently and whenever
and as often as Landlord and/or Tenant shall, as applicable, deem necessary. In
addition, Tenant shall be responsible for all reasonable attorneys' fees and
other expenses incurred by Landlord in enforcing or seeking to enforce this
Lease as a result of a default hereunder by Tenant.
26
ARTICLE XV
----------
QUIET ENJOYMENT; LANDLORD'S AND TENANT'S REPRESENTATIONS AND WARRANTIES
15.1 Covenants and Warranties. Landlord covenants and warrants that
------------------------
Landlord has good right and full power to let and lease the Premises and to
enter into the agreements contained herein. Landlord agrees that, if and as long
as Tenant is not in default after the applicable grace periods and any notice
required under the terms hereof, Tenant shall quietly and peaceably hold,
possess and enjoy the Premises for the full term of this Lease without any
hindrance or molestation by Landlord or its agents or employees, and Landlord
shall defend the use and occupancy of the same by Tenant against the lawful
claims of all persons whomsoever, except with respect to such matters of title
as affect the Premises as of the date hereof, pursuant to the title search
attached hereto as Exhibit "D" (the "Permitted Exceptions"). Landlord shall
-----------
execute and deliver such affidavits, certificates and other documents as may be
reasonably requested by Tenant or Tenant's title insurance company to permit
Tenant to obtain a title policy issued by the Title Company insuring Tenant's
leasehold interest on the Premises in an amount reasonably satisfactory to
Tenant, subject only to the Permitted Exceptions. Landlord covenants, warrants
and represents that such matters of title, either individually or in the
aggregate, do not and shall not materially interfere with Tenant's use of the
Premises contemplated hereunder.
15.2 Landlord's Representations and Warranties. Landlord makes the
-----------------------------------------
following representations, warranties and covenants to Tenant:
(a) Landlord has complete and full authority to execute this Lease subject
to the provisions hereof.
(b) To Landlord's knowledge and belief, neither the entering into of this
Lease nor the consummation of the transaction contemplated hereby will
constitute or result in a violation or breach by Landlord of any judgment,
order, writ, injunction or decree issued against or imposed upon it, or will
result in a violation of any applicable law, order, rule or regulation of any
governmental authority.
27
(c) Landlord has no knowledge of, nor has Landlord received any notice of,
any actual or threatened action, litigation, or proceeding by any
organization, person, individual or governmental agency (including
governmental actions under condemnation authority or proceedings similar
thereto) against the Land, the Building or Landlord, nor has any such
organization, person, individual or governmental agency communicated to
Landlord anything which Landlord believes to be a threat of any such action,
litigation or proceeding.
(d) The parties executing this Lease on behalf of Landlord have the power
and authority to make the provisions hereof the legal, valid and binding
obligations of Landlord.
15.3 Tenant's Representations and Warranties. Tenant makes the following
---------------------------------------
representations, warranties and covenants to Landlord:
(a) Tenant has complete and full authority to execute this Lease subject to
the provisions hereof.
(b) To Tenant's knowledge and belief, neither the entering into of this
Lease nor the consummation of the transaction contemplated hereby will
constitute or result in a violation or breach by Tenant of any judgment,
order, writ, injunction or decree issued against or imposed upon it, or will
result in a violation of any applicable law, order, rule or regulation of any
governmental authority.
(c) The parties executing this Lease on behalf of Tenant have the power and
authority to make the provisions hereof the legal, valid and binding
obligations of Tenant.
28
ARTICLE XVI
-----------
SUBORDINATION
16.1 Subordination and Attornment. This Lease shall be subordinate to the
----------------------------
lien of any present or future mortgage upon the Premises; on the condition,
however, that the holder of any present or future mortgage upon the Premises
(the "Mortgagee") shall enter into a subordination, non-disturbance and
attornment agreement ("SNDA") with Tenant, on Mortgagee's form of SNDA
agreement, providing that in the event of foreclosure or other action or
exercise of rights taken under the mortgage by Mortgagee, this Lease and all of
the rights of Tenant hereunder shall not be disturbed, but shall continue in
full force and effect. As used herein, "mortgage" shall include mortgages, deeds
of trust, deeds to secure debt or other similar financing instruments. Landlord
shall provide Tenant with the SNDA for any mortgage now affecting the Premises
prior to the Commencement Date.
ARTICLE XVII
------------
TRANSFERS BY AND LIABILITY OF LANDLORD
17.1 Transfers of Landlord's Interest. No transfer or sale of Landlord's
--------------------------------
interest in the Premises or hereunder shall release Landlord from any of its
obligations or duties hereunder prior thereto. Notwithstanding the foregoing,
Landlord shall be released of any ongoing obligations hereunder from and after
the date of such transfer upon the assumption of all such obligations and duties
by the transferee of Landlord.
17.2 Landlord's Liability. Landlord's liability for its obligations
--------------------
hereunder with respect to any monetary payment shall be limited to Landlord's
interest in the Park and the Building and other buildings and improvements
thereon, including without limitation the rents, insurance proceeds, sales
proceeds and condemnation awards therefrom.
ARTICLE XVIII
-------------
MISCELLANEOUS
18.1 Holding Over. In the event of Tenant's continued occupancy of the
------------
Premises after the expiration of the term of this Lease or any renewal or
extension thereof, or any earlier termination provided or permitted by this
Lease, with the
29
consent of Landlord such tenancy shall be from month-to-month at double the Base
Rent in effect on the termination date, computed on a monthly basis for each
month or part thereof during such holding over, and such continued occupancy
shall not defeat Landlord's right to possession of the Premises. All other
covenants, provisions, obligations and conditions of this Lease shall remain in
full force and effect during such month-to-month tenancy, except that the legal
rights of the parties shall be governed by the principles of a month-to-month
tenancy, including without limitation termination or change in rent upon thirty
(30) days notice.
18.2 Non-Waiver of Default. No acquiescence by either party to any default
---------------------
by the other party hereunder shall operate as a waiver of its rights with
respect to any other breach or default, whether of the same or any other
covenant or condition.
18.3 Recording. Neither this Lease nor any memorandum thereof may be
---------
recorded in the public records of Broward County, Florida.
18.4 Notice. Any notice or consent required to be given by or on behalf of
------
any party hereto to any other party shall be in writing and sent by facsimile
with written confirmation of transmittal, mailed by registered or certified
mail/return receipt requested, or sent by air courier or expedited mail service
or personal delivery, addressed as follows:
If to Tenant: Aladdin Manufacturing Corporation
160 South Industrial Boulevard
Calhoun, Georgia 30701
Att: Salvatore J. Perillo, Esq.
Facsimile: 1-706-624-2483
With a copy to: Robert Adrian, Regional Manager
Aladdin Manufacturing Corporation
1320 NW 163rd Street
Miami, Florida 33169
Facsimile: (305) 620-7341
If to Landlord: Seneca G&H, L.L.C.
2901 SW 8th Street
30
Suite 204
Miami, Florida 33135
Attention: Jose R. Boschetti and
Charles R. Abele, Jr.
Facsimile: (305) 541-1314
With a copy to: Ricardo L. Fraga, Esq.
Greenberg Traurig, P.A.
1221 Brickell Avenue
Suite 2100
Miami, Florida 33131
Facsimile: (305) 579-0717
or at such other address as may be specified from time to time in writing. All
such notices hereunder shall be deemed to have been given on the date of
delivery or the date marked on the return receipt unless delivery is refused or
cannot be made, in which case the date of postmark shall be deemed the date
notice has been given.
18.5 Successors and Assigns. All covenants, promises, conditions,
----------------------
representations, and agreements herein contained shall be binding upon, apply,
and inure to the parties hereto and their respective heirs, executors,
administrators, successors, and permitted assigns.
18.6 Time is of the Essence. Time is of the essence hereof.
----------------------
18.7 Partial Invalidity. If any provision of this Lease or the application
------------------
thereof to any person or circumstance shall to any extent be held invalid, then
the remainder of this Lease or the application of such provision to persons or
circumstances other than those as to which it is held invalid shall not be
affected thereby, and each provision of this Lease shall be valid and enforced
to the fullest extent permitted by law.
18.8 Interpretation. In interpreting this Lease in its entirety, the
--------------
printed provisions of this Lease and any additions written or typed thereon
shall be given equal weight, and there shall be no inference, by operation of
law or otherwise, that any provision of this Lease shall be construed against
either party hereto. This Lease constitutes the complete agreement of Landlord
and Tenant with respect to the subject matter hereof. No representations,
inducements, promises or agreements, oral or
31
written, have been made by Landlord or Tenant, or anyone acting on behalf of
Landlord or Tenant, which are not contained herein, and any prior agreements,
promises, negotiations, or representations are superseded by this Lease. This
Lease may not be amended except by an instrument in writing signed by both
parties hereto.
18.9 Headings, Captions and References. The section captions contained in
---------------------------------
this Lease are for convenience only and do not in any way limit or amplify any
term or provision hereof. The use of the terms "hereof," "hereunder" and
"herein" shall refer to this Lease as a whole, inclusive of the Exhibits
(including the Agreement), except when noted otherwise. The use of the masculine
or neuter genders herein shall include the masculine, feminine and neuter
genders and the singular form shall include the plural when the context so
requires.
18.10 Brokerage Commissions. Landlord and Tenant each warrants and
---------------------
represents to the other that there are no brokers, finders fees or any real
estate commissions due to any broker, agent or other party in connection with
the negotiation or execution of this Lease or on behalf of either of them except
for William Webb & Associates, Inc. and Cushman & Wakefield of Florida, Inc.
(collectively "Broker"), which shall be paid a commission by Landlord pursuant
to a separate agreement. Under no circumstances shall Tenant be obliged to make
any payment to Broker. Landlord and Tenant hereby agree to indemnify and hold
the other harmless from and against any and all costs, expenses, liabilities,
causes of action, claims or suits by any party for compensation, commissions,
fees or other sums (including without limitation reasonable attorney's fees)
claimed to be due or owing with respect to the representation of Landlord or
Tenant as applicable, in effecting this Lease. William Webb & Associates
represented Tenant. Cushman & Wakefield represented Landlord.
18.11 Time. Whenever the last day for the exercise of any privilege or the
----
discharge of any duty hereunder shall fall upon a Saturday, Sunday or any public
or legal holiday, the party having such privilege or duty shall have until 5:00
p.m. on the next succeeding business day to exercise such privilege or to
discharge such duty.
18.12 Estoppel Certificate. Either party agrees that within fifteen (15)
--------------------
days following request therefor by the other
32
party to execute and deliver to the requesting party a statement, certifying to
its actual knowledge (a) whether or not this Lease is in full force and effect,
(b) the date of commencement and termination of the term of this Lease, (c) the
date to which rental and all other charges hereunder are paid currently without
any offset or defense thereto (or stating any such offset or defense), (d) the
amount of rental and all other charges hereunder, if any, paid in advance, (e)
whether or not this Lease has been modified and, if so, identifying the
modifications, (f) that there are no uncured defaults by the other party or
describing the claimed defaults and (g) such other matters as the requesting
party shall reasonably request. Nothing in any such estoppel statement shall be
deemed to modify or amend this Lease.
18.13 Governing Law. This Lease shall be construed under the laws of the
-------------
State of Florida.
18.14 Force Majeure. In the event that either party shall be delayed or
-------------
hindered in, or prevented from, the performance of any work, service, or other
act required under this Lease to be performed by the party (other than monetary
obligations) and such delay or hindrance is due to strikes, lockouts, acts of
God, governmental restrictions, enemy act, civil commotion, unavoidable fire or
other casualty, or other causes of a like nature beyond the reasonable control
of the party so delayed or hindered (a "Force Majeure Event"), then performance
of such work, service, or other act shall be excused for the period of such
delay and the period for the performance of such work, service, or other act
shall be extended for a period equivalent to the period of such delay. Lack of
financial resources on the part of either party shall not be a Force Majeure
Event.
18.15 Radon Gas. RADON IS A NATURALLY OCCURRING RADIOACTIVE GAS THAT, WHEN
----------
IT HAS ACCUMULATED IN A BUILDING IN SUFFICIENT QUANTITIES, MAY PRESENT HEALTH
RISKS TO PERSONS WHO ARE EXPOSED TO IT OVER TIME. LEVELS OF RADON THAT EXCEED
FEDERAL AND STATE GUIDELINES HAVE BEEN FOUND IN BUILDINGS IN FLORIDA. ADDITIONAL
INFORMATION REGARDING RADON TESTING MAY BE OBTAINED FROM YOUR COUNTY PUBLIC
HEALTH UNIT. [NOTE: THIS PARAGRAPH IS PROVIDED FOR INFORMATIONAL PURPOSES
PURSUANT TO FLORIDA STATUTES.]
18.16 Special Stipulations. If any Schedule of Special Stipulations is
--------------------
attached hereto and if there is any conflict
33
with the provisions hereof, then the Special Stipulations shall govern and
control.
18.17 Guaranty. At the time that this Lease is executed by Tenant, Tenant
--------
shall procure that Tenant's parent company (Mohawk Industries, Inc.) executes
and delivers Landlord's form of unconditional guaranty in favor of Landlord,
unconditionally guarantying the payment and performance of all of Tenant's
obligations under this Lease, as same may be amended by mutual written agreement
executed by Landlord and Tenant.
18.18 Signs. Tenant shall not make any changes to the exterior of the
-----
Premises, install any exterior lights, decorations, balloons, flags, pennants,
banners, or painting, or erect or install any signs, windows or door lettering,
placards, decorations, or advertising media of any type which can be viewed from
the exterior of the Premises, without Landlord's prior written consent.
18.19 Access. Landlord and its agents, representatives, and contractors may
------
enter the Premises at any reasonable time to inspect the Premises and to make
such repairs as may be required or permitted pursuant to this Lease and for any
other business purpose. Landlord and Landlord's representatives may enter the
Premises during business hours for the purpose of showing the Premises to
prospective purchasers and, during the last year of the Initial Term or any
Extension Term, to prospective tenants, provided, that such showings do not
materially interfere with Tenant's business and further provided, that Landlord
gives Tenant at least 24 hours prior notice of such showings. Landlord may erect
a suitable sign on the Premises stating the Premises are available to let or
that the Project is available for sale. Landlord may grant easements, make
public dedications, designate common areas and create restrictions on or about
the Premises, provided that no such easement, dedication, designation or
restriction materially interferes with Tenant's use or occupancy of the
Premises. At Landlord's request, Tenant shall execute such instruments as may be
necessary for such easements, dedications or restrictions.
18.20 Waiver of Jury Trial. TENANT AND LANDLORD WAIVE ANY RIGHT TO TRIAL BY
--------------------
JURY OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE, BETWEEN LANDLORD AND TENANT ARISING OUT OF THIS
LEASE OR ANY OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR
34
DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.
18.21 Net Lease. Landlord and Tenant acknowledge and agree that this Lease
---------
is a net lease. In this regard, except as specifically provided herein, Tenant
shall be responsible and shall pay Base Rent, Florida Sales Taxes pertaining to
the Premises, and any and all costs, expenses and charges of any nature or kind
whatsoever relating to the operation, maintenance, repair, associated
administration of the Premises, or Tenant's use and occupation of the Premises.
In addition, Tenant shall be responsible for its proportionate share of said
charges with respect to the Common Areas.
18.22 Rules and Regulations. Tenant shall, at all times during the Initial
---------------------
Terms and any extensions thereof, comply with all reasonable rules and
regulations at any time or from time to time established by Landlord covering
use of the Premises, the Building, and the Park. The current rules and
regulations are attached hereto. In the event of any conflict between said
rules and regulations and other provisions of this Lease, the other terms and
provisions of this Lease shall control. Landlord shall not have any liability or
obligation for the breach of any rules or regulations by other tenants in the
Park. Landlord agrees not to establish and enforce any changes in the Rules and
Regulations of the Park that would have a materially adverse effect on Tenant's
operation of the Premises as anticipated under this Lease.
18.23 Constituent Documents. Within five (5) days following Tenant's
---------------------
execution of this Lease, Tenant shall provide Landlord with an original
certificate of good standing for Tenant and Guarantor from their State of
formation; said certificate to be dated within thirty days of the date on which
same is delivered to Landlord. In addition, within said five (5) days, Tenant
shall also provide Landlord with a copy of its corporate resolutions and that of
Guarantor authorizing Tenant to enter into the Lease and Guarantor to guarantee
Tenant's obligations hereunder respectively and authorizing the individual
signing the Lease and Guarantee on behalf of Tenant and Guarantor respectively
to do so.
18.24 First Offer of Adjacent Space. During the term of this Lease,
-----------------------------
provided that Tenant is not, and has not been, in default under the Lease,
Landlord shall provide Tenant with
35
written notice of any available space adjacent to the Premises in the Building.
Tenant shall have a right of first offer to lease such available adjacent
space on substantially the same terms and conditions provided in this Lease. The
terms and conditions of the new lease for such adjacent space shall be the same
as those of this Lease except that (i) base rent under such lease during the
first year thereof shall be equal to the rent then in effect under this Lease,
subject to annual adjustments pursuant to this Lease, (ii) the term of such
lease shall be for at least five years, (iii) Tenant shall accept delivery of
such space in its then AS IS condition, and (iv) such lease shall not provide
for a tenant improvement allowance. In the event that Tenant does not elect to
exercise said right of first offer, in writing, within fifteen (15) days
following Landlord's notice of such available adjacent space, Tenant shall be
deemed to have waived such right with regard to such available adjacent space at
that time, however, such waiver shall not affect Tenant's right of first offer
with regard to such adjacent space in the event that it subsequently becomes
available again during the term of this Lease. In addition, during the term of
this Lease, in the event that Tenant desires to lease all of the Building space
adjacent to the Premises (which adjacent space consists of an aggregate of
approximately 70,055 square feet), and such space is occupied by other
tenant(s), Landlord shall exercise diligent efforts to negotiate with such
tenant(s) to have same relocated to other available space in the Park, provided,
that same is at no cost to Landlord. Tenant shall bear all costs associated with
such relocation and shall accept such space in its then AS IS condition.
18.25 Rules and Regulations. With respect to this Lease, the following
---------------------
provision of paragraph 15 of the Rules and Regulations, shall be deemed to be
deleted:
"The Tenant shall furnish the Landlord, upon request, with the current license
numbers of all vehicles owned or used by the Tenant or its employees or agents
and the Tenant thereafter shall notify the Landlord of any changes in such
numbers within five (5) days after the occurrence thereof."
18.26 Credit for Unused Tenant Improvement Allowance: In the event that
----------------------------------------------
the TI Cost is less than the Tenant Improvement Allowance ($786,132.99),
Landlord agrees to reduce the Base Rent by 1 cent per square foot for each whole
increment of $11,000.00 in cost savings, however, in no event shall the
36
Base Rent ever be less than $5.00 per square foot. In the event that Tenant
elects to utilize all or part of the above credit, a new rent schedule which is
now exhibit "C" in the lease Agreement will be created and executed by the
parties at the time of the rent commencement.
IN WITNESS WHEREOF this Lease has been executed as a sealed instrument as
of the day and year first above written.
LANDLORD:
Witnesses: SENECA G&H, L.L.C.,
a Florida limited liability company
/s/ Robert W. Adrian By: /s/ Charles Roabele, Jr.
----------------------------- -----------------------------------
Name: Robert W. Adrian Name: Charles Roabele, Jr.
----------------------------------
/s/ William C. Webb III Title: Member
----------------------------- ---------------------------------
William C. Webb III (SEAL)
TENANT:
Witnesses: ALADDIN MANUFACTURING CORPORATION,
a Delaware corporation
/s/ Elaine Busbee By: /s/ Salvatore J. Perillo
----------------------------- -----------------------------------
Name: Elaine Busbee Name: Salvatore J. Perillo
----------------------------------
/s/ Misty Young Title: Senior Counsel
----------------------------- ---------------------------------
Name: Misty Young (CORPORATE SEAL)
37
LIST OF EXHIBITS
Exhibit "A-1" Legal Description of Land
-------------
Exhibit "A-2" Site Plan
-------------
Exhibit "A-3" Parking Area
-------------
Exhibit "B" Landlord's Improvements
-----------
Exhibit "C" Rent Schedule
-----------
Exhibit "D" Permitted Exceptions
-----------
38
EXHIBIT "A-l"
LEGAL DESCRIPTION OF LAND
[To be provided by Landlord]
EXHIBIT "A-1"
"SKETCH OF LAND"
[ARTWORK]
EXHIBIT "A-2"
"SITE PLAN"
[ARTWORK]
EXHIBIT "A-3"
"PARKING AREA AND PREMISES"
[ARTWORK]
EXHIBIT "B"
-----------
LANDLORD'S IMPROVEMENTS
(WORK LETTER)
Section B.1 Force and Effect. The provisions of this Exhibit: "B" shall
----------------
have the same force and effect as if this Exhibit "B" were within the body of
the Lease. However, in the event that there are any contradiction(s) between the
other terms or conditions of this Lease and this Exhibit "B", the terms of this
Exhibit "B" shall prevail.
Section B.2 Plans and Specifications. Landlord agrees, at Landlord's sole
------------------------
cost and expense (subject to reimbursement from Tenant as set forth below if
costs exceed the Tenant Allowance), to perform the work ("Landlord's Work")
required to complete the Tenant improvements described on Schedule B-1 hereto
-------------
(the "Tenant Improvements"). If the Tenant Improvements have not yet been agreed
to, then the plans and specifications (the "Plans and Specifications") therefor
shall be agreed upon as described on Schedule B-1. Landlord's Work shall be
------------
completed and the Tenant Improvements installed and constructed in a good and
workmanlike manner, with new materials, according to sound engineering practice
and in compliance with law.
Section B.3 Tenant Allowance and Tenant Contribution. The Tenant
----------------------------------------
Improvement Allowance shall be $786,132.99. In addition, for the purposes of
this Work Letter, Landlord's costs shall only include costs of the Tenant
Improvements and shall not include any costs for the base Building, the Common
Areas or other aspects of the Park, all of which shall be constructed by
Landlord at Landlord's sole cost and expense.
In the event that the cost for the Tenant Improvements (the "TI Cost") will
result in a cost in excess of the Tenant Improvement Allowance (such excess is
hereinafter defined as the "Tenant Costs"), then Tenant may elect to revise the
Plans and Specifications to reduce or eliminate such increase in costs;
nevertheless, Tenant shall be solely responsible for the Tenant Costs.
Notwithstanding anything herein to the contrary, to the extent Landlord incurs
costs and expenses for matters attributable to Landlord's negligence or
misconduct, Landlord shall pay all such costs, expenses and fees and all such
costs, expenses and fees shall be excluded from the cost of Landlord's Work for
the purposes of this Lease. Landlord shall also pay all of the following costs,
fees and expenses, which costs, fees
1
and expenses shall also be excluded from the cost of Landlord's Work for the
purposes of this Lease: (i) finance charges, (ii) architectural and engineering
fees (excluding revision fees) (iii) the costs of any studies and reports,
(including, but not limited to, soils and geology reports), (iv) the costs of
any work with respect to the Premises, Building or the Park, other than for the
Tenant Improvements, (v) any internal or direct administrative or supervisory
costs incurred by Landlord for Landlord's staff, (vi) the cost of any building
or other permit required for the base building, and (vii) costs and expenses of
any plan check or similar fee and standard building permits and fees attributed
to the base building, all of which Landlord shall pay at Landlord's cost and
expense (and not as part of the Tenant Allowance).
Section B.4 Commencement and Completion of Construction. Landlord shall
-------------------------------------------
commence and substantially complete construction of the Landlord's Work in
accordance with the Plans and Specifications with due diligence no later than
the date provided for in the construction schedule subject only to force
majeure.
"Substantial Completion" shall mean that a certificate of occupancy or a
temporary certificate of occupancy has been obtained for the Premises and that
Landlord's Work is sufficiently complete so as to allow Tenant to occupy the
Premises for the use and purposes intended without unreasonable disturbance or
interruption; provided that Landlord, its employees, agents, and contractors,
shall be allowed to enter upon the Premises at any reasonable time(s) following
substantial completion as necessary to complete any unfinished details pursuant
to a punchlist to be prepared by Tenant and delivered to Landlord within thirty
(30) days following the date of substantial completion.
Section B.5 Bid List. Prior to commencement of Landlord's construction of
--------
the Tenant Improvements, Landlord and Tenant shall have agreed in writing to a
list of up to three general contractors who shall be designated as the parties
from whom bids will be sought to construct the Premises ("Bid List"), which list
shall be incorporated herein and attached hereto as Schedule "B-3" (the "Bid
--------------
List"). Each of such contractors shall be reasonably acceptable to both Landlord
and Tenant and shall have substantial experience in the general construction
industry in the area where the Park is located in connection with similar such
projects and shall base their bids on the form of
2
construction contract provided to such contractors. Upon agreement as to the
Plans and Specifications, Landlord shall submit same to the parties on the Bid
List for their respective bids, and upon receipt of such bids, Landlord shall
deliver to Tenant copies thereof. Unless Tenant shall otherwise designate, the
lowest bidder shall be awarded the construction contract for Landlord's Work.
Tenant shall have the right to designate the contractor to which the general
construction contract is to be awarded, however, in such event, Tenant shall
guaranty such contractor's timely completion and delivery of the work contracted
for. Tenant shall have access to all of the information available in connection
with the bids submitted in accordance with this Section B.5. Landlord shall
notify Tenant prior to opening sealed bids and Tenant shall have the right to be
present when such bids are opened. Notwithstanding anything herein to the
contrary, Landlord may provide the bid that Landlord and Tenant have otherwise
agreed to accept (the "Pending Approved Bid") to the base Building contractor
and, in the event that the Base building contractor bids or revises its prior
bid to match, or be less than the Pending Approved Bid, Landlord shall be
entitled to select the base Building contractor's bid, in lieu of the Pending
Approved Bid.
Section B.6 Delivery of Possession of the Premises. Landlord shall deliver
--------------------------------------
possession of the Premises to Tenant with the Tenant Improvements substantially
completed and a permanent or temporary Certificate of Occupancy for the
Premises no later than the Commencement Date. As of the Commencement Date,
Landlord shall have completed the Common Areas necessary for the operation of
the Premises for the use contemplated hereunder (i.e. roads providing access to
and from the Premises, parking for the Premises, and utilities to the Premises).
Section B.7 Delays. Notwithstanding anything herein to the contrary, the
------
Base Rent under the Lease shall be abated one day for each day the Commencement
Date is delayed (excluding force majeure delays) by Landlord's failure to
complete the Tenant Improvements (but not to the extent the delay is caused by
Tenant and not in the event that Tenant designates the contractor to which the
contract was awarded). This provision is not intended to limit Tenant's rights
and remedies specified in the Lease, including, without limitation, those rights
specified in this Work Letter.
Section B.8 Workmanlike Manner, Information to Tenant. Landlord agrees to
-----------------------------------------
ensure that all work to be done by Landlord
3
on the Premises is performed in a good and workmanlike manner. During the course
of Landlord's construction, Landlord shall keep Tenant apprised of the progress
of same, shall provide copies of existing reports and other documents relating
to same upon request and shall permit Tenant to make such inspections and audits
as Tenant may deem reasonably necessary or appropriate.
Section B.9 Tenant Delays. Tenant shall be responsible for any delay
-------------
(including associated costs) in the substantial completion of the Premises
resulting from any of the following causes:
(i) Tenant's failure to pay any portion of Tenant's Costs, as
hereinafter defined, when due; or
(ii) Tenant's specification of special materials or finishes, or
special installations, which special items cannot be delivered or completed
within Landlord's construction schedule (subject to Landlord's obligation to
give Tenant prior notice of same at the time of such specification); or
(iii) any change in the space plan and/or the plans and specifications
caused by Tenant, even though Landlord may approve such change (Landlord agrees
to estimate the delay to be caused by a change order, provided Tenant expressly
requests such estimate at the time it requests a change order); or
(iv) any other delay in substantial completion of the Tenant
Improvements directly attributable to the negligent or willful acts or omissions
of Tenant, its employees, or agents.
If any delay caused by Tenant results in or contributes to a delay in
substantial completion of the Premises, then substantial completion shall be
deemed to have occurred as of the date Landlord would have otherwise achieved
substantial completion, but for Tenant's delay. Landlord will specify in writing
to Tenant the Tenant delay(s) which resulted in or contributed to a delay in
substantial completion of the Premises.
Section B.10 Tenant Costs. To the extent that the plans and specifications
------------
reflect the scope of work described by the space plan, then Landlord, at its
expense not to exceed the Tenant Improvement Allowance set forth above, shall
cause the
4
construction of the Tenant Improvements, using Landlord's building-standard
methods and materials as modified by Tenant's pre-approved modifications to
plans and specifications. To the extent that the revised construction budget
exceeds the Tenant Improvement Allowance any such excess will be at Tenants
expense ("Tenant's Costs"). Tenant's Costs shall be paid to Landlord as follows:
(i) Prior to commencement of construction of the Tenant Improvements,
Tenant shall pay Landlord an amount equal to fifty (50%) percent of the Tenant's
Costs, as such amount is then determined by reference to the construction
budget.
(ii) When fifty (50%) of the Tenant Improvements are complete in
accordance with the plans and specifications (as verified in writing by
Landlord's architect), Tenant shall pay Landlord an amount equal to the
remaining unpaid balance of Tenant's Costs as such amount can then be reasonably
determined by Landlord based on available information.
(iii) Within ten (10) days following Landlord's submittal to Tenant
of a final accounting of Tenant's Costs, Tenant shall pay Landlord the then
remaining balance of Tenant's Costs, or Landlord shall reimburse Tenant as to
any excess amounts previously paid, as the case may be.
Tenant's Costs represent a reimbursement of monies expended by Landlord on
Tenant's behalf. Payment when due shall be a condition to Landlord's continued
performance under this Work Letter. Any delay in construction of the Tenant
Improvements or in Tenant taking occupancy of the Premises resulting from
Tenant's failure to make any Tenant's Costs payments when due shall be Tenant's
responsibility. Tenant's failure to pay any portion of Tenant's Costs when due
shall constitute a default under the Lease (subject to any applicable notice
requirements or grace periods).
5
EXHIBIT "C"
RENT SCHEDULE MOHAWK
TENANT MOHAWK INDUSTRIES
SQUARE FOOTAGE 186,537
ANNUAL INFLATOR ("A") 3.00%
ANNUAL INFLATOR ("B") 2.00%
ANNUAL INFLATOR ("C")
RATE PER SF $5.20
ANNUAL MONTHLY
BASE RENT BASE RENT
YEAR 1 $5.20 $ 969,992.40 $ 80,832.70
YEAR 2 $5.36 $ 999,092.17 $ 83,257.68
YEAR 3 $5.52 $l,029,064.94 $ 85,755.41
YEAR 4 $5.63 $1,049,646.24 $ 87,470.52
YEAR 5 $5.74 $1,070,639.16 $ 89,219.93
YEAR 6 $5.85 $1,092,051.94 $ 91,004.33
YEAR 7 $5.97 $1,113,892.98 $ 92,824.42
YEAR 8 $6.09 $1,136,170.84 $ 94,680.90
YEAR 9 $6.21 $1,158,894.26 $ 96,574.52
YEAR 10 $6.21 $1,158,894.26 $ 96,574.52
OPTION YEARS IF APPLICABLE
YEAR 11 6.21 $1,158,894.26 $ 96,574.52
YEAR 12 6.40 $1,193,661.09 $ 99,471.76
YEAR 13 6.59 $1,229,470.92 $102,455.91
YEAR 14 6.79 $1,266,355.05 $105,529.59
YEAR 15 6.79 $1,266,355.05 $105,529.59
YEAR 16 6.99 $1,304,345.70 $108,695.47
YEAR 17 7.20 $1,343,476.07 $111,956.34
YEAR 18 7.42 $1,383,780.35 $115,315.03
YEAR 19 7.64 $1,425,293.76 $118,774.48
YEAR 20 7.87 $1,468,052.58 $122,337.71
EXHIBIT "D"
PERMITTED EXCEPTIONS
[To be provided by Landlord]
SENECA INDUSTRIAL PARK
----------------------
RULES AND REGULATIONS
---------------------
1. Security. The Landlord may from time to time adopt appropriate systems
---------
and procedures for the security or safety of the Building, any persons
occupying, using, or entering the same, or any equipment, furnishings, or
contents thereof, and the Tenant shall comply with the Landlord's reasonable
requirements relative thereto.
2. Return of Keys. At the end of the Term, the Tenant shall promptly return
---------------
to the Landlord all keys for the Building and Premises which are in the
possession of the Tenant. In the event any Tenant fails to return keys, Landlord
may retain S50.00 of Tenant's security deposit for locksmith work and
administration.
3. Repair, Maintenance, Alterations, and Improvements. The Tenant shall
---------------------------------------------------
carry out Tenant's repair, maintenance, alterations, and improvements in the
Premises only during times agreed to in advance by the Landlord and in a manner
which will not interfere with the rights of other tenants in the Building.
4. Water Fixtures. The Tenant shall not use water fixtures for any purpose
---------------
for which they are not intended, nor shall water be wasted by tampering with
such fixtures. Any cost or damage resulting from such misuse by the Tenant shall
be paid for by the Tenant.
5. Personal Use of Premises. The Premises shall not be used or permitted
-------------------------
to be used for residential, lodging, or sleeping purposes or for the storage of
personal effects or property not required for business purposes.
6. Heavy Articles. The Tenant shall not place in or move about the Premises
---------------
without the Landlord's prior written consent any safe or other heavy article
which in the Landlord's reasonable opinion may damage the Building, and the
Landlord may designate the location of any such heavy articles in the Premises.
7. Bicyles, Animals. The Tenant shall not bring any animals or birds into
-----------------
the Building, and shall not permit bicycles or other vehicles inside or on the
sidewalks outside the Building except in areas designated from time to time by
the Landlord for such purposes.
8. Deliveries. The Tenant shall ensure that deliveries of supplies,
-----------
fixtures, equipment, furnishings, wares, and merchandise to the Premises are
made through such entrances, elevators, and corridors and at such times as may
from time to time be designated by the Landlord, and shall promptly pay or cause
to be paid to the Landlord the cost of repairing any damage in the Building
caused by any person making improper deliveries.
9. Solicitations. The Landlord reserves the right to restrict or prohibit
--------------
canvassing, soliciting, or peddling in the Building.
10. Food and Beverages. Only persons approved from time to time by the
-------------------
Landlord may prepare, solicit orders for, sell, serve, or distribute foods or
beverages in the Building, or use the Common Areas for any such purpose. Except
with the Landlord's prior written consent and in accordance with arrangements
approved by the Landlord, the Tenant shall not permit on the Premises the use of
equipment for dispensing food or beverages or for the preparation, solicitation
of orders for, sale, serving, or distribution of food or beverages.
11. Refuse. The Tenant shall place all refuse in proper receptacles
-------
provided by the Tenant at its expense in the Premises or in receptacles (if any)
provided by the Landlord for the Building, and shall keep sidewalks and
driveways outside the Building, and lobbies, corridors, stairwells, ducts, and
shafts of the Building, free of all refuse.
12. Obstructions. The Tenant shall not obstruct or place anything in or
------------
on the sidewalks or driveways outside the Building or in the lobbies, corridors,
stairwells, or other Common Areas, or use such locations for any purpose except
access to and exit from the Premises without the Landlord's prior written
consent. The Landlord may remove at the Tenants expense any such obstruction or
thing caused or placed by the Tenant (and unauthorized by the Landlord) without
notice or obligation to the Tenant.
13. Proper Conduct. The Tenant shall not conduct itself in any manner which
--------------
is inconsistent with the character of the Building as a first quality building
or which will impair the comfort and convenience of other tenants in the
Building.
14. Employees, Agents and Invitees. In these Rules and Regulations,
------------------------------
"Tenant" includes the employees, agents, invitees and licensees of the Tenant
and others permitted by the Tenant to use or occupy the Premises.
15. Parking. If the Landlord designates tenant parking areas for the
-------
Building, the Tenant shall park its vehicles and cause its employees and agents
to park their vehicles only in such designated parking areas. The Tenant shall
furnish the Landlord, upon request, with the current license numbers of all
vehicles owned or used by the Tenant or its employees or agents and the Tenant
thereafter shall notify the Landlord of any changes in such numbers within five
(5) days after the occurrence thereof. In the event of failure of the Tenant or
its employees or agents to park their vehicles in such designated parking areas,
the Tenant shall forthwith on demand pay to the Landlord the sum of Twenty and
No/100 ($20.00) Dollars per day per each car so parked. Landlord may itself or
through any agent designated for such purpose, make, administer, and enforce
additional rules and regulations regarding parking by tenants and by their
employees or agents, including, without limitation, rules and regulations
permitting the Landlord or such agent to move any vehicles improperly parked to
the designated tenant or employee parking areas. No disabled vehicle shall be
left in the parking areas of the Building for more than 24 hours.
GUARANTY OF LEASE
THIS GUARANTY OF LEASE is made as of October 15, 1999, by Mohawk
Industries, Inc., a Delaware corporation (the "Guarantor") in favor of Seneca
G&H, L.L.C., a Florida limited liability company (the "Landlord").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Aladdin Manufacturing Corporation, a Delaware corporation (the
"Tenant"), desires to lease from Landlord the premises more particularly
described in Exhibit "A" attached hereto (the "Premises");
WHEREAS, Guarantor and Tenant have requested Landlord as lessor to enter
into a lease agreement with Tenant as lessee dated as of the date hereof (the
"Lease") for the demise of the Premises to Tenant for a term of years more
particularly described therein; and
WHEREAS, Landlord has declined to enter into the Lease unless Guarantor
unconditionally guarantees the Lease in the manner hereinafter set forth.
NOW, THEREFORE, to induce Landlord to enter into the Lease, the undersigned
Guarantor hereby agrees as follows:
1. Guarantor unconditionally guarantees to Landlord the Tenant's full and
punctual performance and observance of all terms, covenants and conditions
contained in the Lease on Tenant's part to be kept, performed or observed.
Guarantor waives notice of any breach or default by Tenant. If, at any time,
default shall be made by Tenant in the performance or observance of any of the
terms, covenants or conditions contained in the Lease on Tenant's part to be
kept, performed or observed, Guarantor will keep, perform and observe the same,
as the case may be, in place and stead of Tenant.
2. Landlord may waive any of the terms or conditions of the Lease, or give
any consent to any manner or thing relating to the Lease, or grant any
indulgences or extensions of time to Tenant, all without notice to Guarantor and
without releasing the obligations of Guarantor hereunder.
3. The obligations of Guarantor hereunder shall not be released or
diminished by: (a) Landlord's receipt, application or release of security given
for the performance and observance of covenants and conditions contained in the
Lease on Tenant's part to be performed or observed; nor (b) any reletting of the
Premises or any related action taken by Landlord in accordance with the terms of
the Lease; nor (c) any modification or renewal or extension of the Lease or any
change in the size or location of the Premises agreed to by Tenant, but in case
of any such modification or change, the liability of Guarantor shall be deemed
modified in accordance with the terms of any such modification of the Lease or
change in the Premises.
4. The liability of Guarantor hereunder shall not be affected in any way
by: (a) the release or discharge of Tenant in any insolvency, receivership,
bankruptcy or other proceedings; nor (b) the impairment, limitation or
modification of the liability of Tenant or the estate of Tenant in bankruptcy,
or of any remedy for the enforcement of Tenant's liability under the Lease,
resulting from the operation of any present or future provision of the United
States Bankruptcy Code or other statute or from any decision in any court; nor
(c) the rejection or disaffirmance of the Lease in any
such proceedings; nor (d) the assignment or transfer of the Lease by Tenant; nor
(e) any subletting of all or any part of the Premises, with or without the
consent of Landlord; or (f) any disability or other defense of Tenant; nor (g)
the cessation of the liability of Tenant from any cause whatsoever.
5. No payments or acts of performance by Guarantor under this Guaranty
shall in any way or at any time entitle Guarantor to any right, claim or cause
of action against Tenant, or to any right, title or interest in or to Tenant's
rights under the Lease or any rights of Landlord, and Guarantor hereby waives,
for the benefit of Landlord and Tenant, any and all such rights which Guarantor
might otherwise have had in the absence of this waiver and which would have
otherwise entitled Guarantor to be a "creditor" of Tenant under the provisions
of the U.S. Bankruptcy Code (Title 11, U.S. Code) or any other bankruptcy or
insolvency law.
6. Guarantor and Landlord hereby voluntarily, knowingly and intentionally
WAIVE ANY AND ALL RIGHTS TO TRIAL BY JURY in any legal action or proceeding
arising under or in connection with this Guaranty or the Lease or concerning the
Premises or pertaining to any transaction related to or contemplated in the
Lease, regardless of whether such action or proceeding concerns any contractual
or tortious or other claim. Guarantor acknowledges that this waiver of jury
trial is a material inducement to Landlord in accepting this Guaranty, that
Landlord would not have accepted this Guaranty without this jury trial waiver,
and that Guarantor has been represented by an attorney or has had an opportunity
to consult with an attorney regarding this Guaranty and understands the legal
effect of this jury trial waiver.
7. In any action or proceeding brought in connection with the Lease or this
instrument: (a) Landlord shall be entitled to recover Landlord's costs and
expenses, including reasonable attorney's fees; (b) Guarantor submits to the
jurisdiction of the state and federal courts in the State of Florida; (c) the
venue of any such action or proceeding may at Landlord's option be laid in
Miami-Dade County, Florida or the county in which the Premises are located, and
Guarantor waives any claim that the same is an inconvenient forum; (d) Guarantor
agrees that service of process may be made by delivery of the same to Robert
Adrian, Regional Manager, Mohawk Industries, Inc., 1320 NW 163rd Street, Miami,
Florida 33169 (with copy to Mohawk Industries, Inc., 160 South Industrial
Boulevard, Calhoun Georgia 30701, Attention: Salvatore J. Perillo Tel. 1-800-
241-4494 Ext. 2660 Fax 1-706-624-2483), or such other agent as Guarantor may
designate from time to time by written notice to Landlord; and (e) Guarantor
waives the right to interpose any set-off or non-compulsory counterclaim, or to
plead laches or any statute of limitation as a defense, or (to the extent the
same may be lawfully waived). The foregoing shall not be deemed to limit
Landlord's right to effect service of process in any other lawful manner or to
bring any such action or proceeding in any other forum permitted by law.
8. This instrument is a continuing guaranty and shall apply to the Lease,
to any extension or renewal thereof and to any holdover term following the
original term or any such extension or renewal.
9. This instrument may not be changed, modified, discharged or terminated
orally or in any manner other than by an agreement in writing signed by
Guarantor and Landlord.
10. This instrument shall be binding upon Guarantor and Guarantor's heirs,
personal representatives, successors and assigns, and this instrument shall
inure to the benefit of Landlord and Landlord's successors and assigns.
-2-
WITNESS the due execution hereof as of the date first written above.
Signed, sealed and delivered in the GUARANTOR:
presence of:
MOHAWK INDUSTRIES, INC., a Delaware
/s/ Misty Young corporation
-----------------------
Print Name: Misty Young By: /s/ Salvatore J. Perillo
---------------------------------
Print Name: Salvatore J. Perillo
/s/ Amy Watson Title: General Counsel
-----------------------
Print name: Amy Watson [CORPORATE SEAL]
STATE OF GEORGIA )
) SS:
COUNTY OF GORDON )
The foregoing instrument was acknowledged before me this 18th day of
October, 1999 by Salvatore J. Perillo, as general counsel of Mohawk Industries,
Inc., a Delaware corporation, on behalf of the corporation.
/s/ Elaine Busbee
------------------------------------------------
Notary Public, State of Georgia
[NOTARIAL SEAL]
My commission expires:
Notary Public, Paulding County, Georgia
My Commission Expires Nov. 3, 2001
-3-
ADDENDUM TO LEASE AGREEMENT
---------------------------
THIS ADDENDUM (this "Addendum") is made as of the 15th day of October,
1999, by and between Seneca G&H, L.L.C., a Florida limited liability company,
having an address at 2901 SW 8th Street, Suite 204, Miami, Florida 33135
("Landlord") and ALADDIN MANUFACTURING - CORPORATION, a Delaware corporation,
with its home office located at 160 South Industrial Boulevard, Calhoun, Georgia
30701 ("Tenant").
W H E R E A S:
- - - - - - -
A. Landlord and Tenant are the parties to that certain Warehouse Lease
dated of even date herewith (the "Lease"), with respect to certain real
property located in Broward County, Florida, more particularly described in the
Lease.
B. The parties desire to amend the Lease in certain respects as more
particularly set forth below.
NOW, THEREFORE, in consideration of Ten Dollars ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. Miscellaneous.
-------------
(a) This Addendum shall be deemed part of, but shall take precedence
over and supersede any provisions to the contrary contained in the Lease.
(b) All initial capitalized terms used in this Addendum shall have the
same meaning as set forth in the Lease unless otherwise provided.
(c) Except as specifically modified hereby, all of the provisions of
the Lease which are not in conflict with the terms of this Addendum shall remain
in full force and effect.
2. Within thirty (30) days following the effective date of this Addendum
(the first day on which both of the parties hereto have executed this Addendum),
Tenant shall have the right to increase the square footage of the Premises, by
written notice of its General Counsel, up to a maximum of 256,592 square feet of
GLA on the terms and conditions contained in the Lease, provided that: (i) the
Premises either (a) represent an expansion within the currently proposed
Building or (b) constitute the entire floor area of a newly designed Building,
(ii) during said thirty (30) days, Tenant provides Landlord with written notice
of its exercise of such right containing Tenant's desired square footage for the
Premises, (iii) the Base Rent, as subjected to increases over the Initial Term
and any Extension Term(s), is increased to reflect the additional square footage
desired by Tenant, (iv) Tenant's Proportionate Share of the Project is increased
to reflect the additional square footage desired by Tenant and Tenant's
Proportionate share of the Building is increased to reflect the additional
square footage desired by Tenant, (v) the design/dimensions of any new Building
desired by Tenant is
-1-
such that, in Landlord's sole and absolute discretion, said Building as designed
can be feasibly utilized and marketed as a multi-tenant Building upon reversion
of Tenant's leasehold interest to Landlord, (vi) Tenant executes an addendum to
the Lease specifically setting forth the foregoing (i.e. the adjusted square
footage of the Premises, the adjusted Base Rent, the adjusted Tenant's
Proportionate Share of the Project, and the adjusted Tenant's Proportionate
Share of the Building), and (vii) Tenant procures the Guarantor's execution of
an addendum to the Guaranty, whereby the Guarantor acknowledges and agrees with
Tenant's execution of said Lease addendum.
IN WITNESS WHEREOF this Addendum has been executed as a sealed instrument
as of the day and year first above written.
LANDLORD:
---------
Witnesses: SENECA G&H, L.L.C.,
a Florida limited liability company
/s/ Robert W. Adrian By: /s/ Charles Roabele, Jr.
----------------------------- -----------------------------------
Name: Robert W. Adrian Name: Charles Roabele, Jr.
----------------------------------
Title: Member
---------------------------------
/s/ William C. Webb III Date: October 19, 1999
----------------------------- ----------------------------------
Name: William C. Webb III (SEAL)
TENANT:
-------
ALLADIN MANUFACTURING CORPORATION,
a Delaware corporation
/s/ Misty Young By: /s/ Salvatore J. Perillo
----------------------------- -----------------------------------
Name: Misty Young Name: Salvatore J. Perillo
----------------------------------
/s/ Amy Watson Title: Senior Counsel
----------------------------- ---------------------------------
Name: Amy Watson Date: October 19, 1999
----------------------------------
(CORPORATE SEAL)
-2-
EX-10.14
5
LEASE BETWEEN ALADDIN MANF. & EX-CELL HOME FASHION
EXHIBIT 10.14
EX-CELL HOME FASHIONS, INC.
AND
ALADDIN MANUFACTURING CORPORATION
-------------------------------
LEASE AGREEMENT
-------------------------------
Dated as of December 3, 1999
Table of Contents
-----------------
Page
----
ARTICLE I DEFINITIONS...................................................... 1
ARTICLE II DEMISING CLAUSES AND RENTAL PROVISIONS........................... 3
Section 2.1. Demise of Facility........................................... 3
Section 2.2. Duration of Lease Term....................................... 3
Section 2.3. Rent......................................................... 3
ARTICLE III MAINTENANCE, USE, MODIFICATIONS, TAXES AND INSURANCE............. 5
Section 3.1. Maintenance, Use, and Modifications of Facility by Tenant.... 5
Section 3.2. Installation of Tenant-Owned Equipment....................... 8
Section 3.3. Taxes, Assessments and Utility Charges....................... 9
Section 3.4. Insurance Required........................................... 10
Section 3.5. Additional Provisions Respecting Insurance................... 10
Section 3.6. Right of Landlord to Pay Insurance Premiums and Other Charges 13
ARTICLE IV DAMAGE, DESTRUCTION AND CONDEMNATION............................. 13
Section 4.1. Damage or Destruction........................................ 13
Section 4.2. Condemnation................................................. 15
ARTICLE V SPECIAL COVENANTS................................................ 17
Section 5.1. No Warranty of Condition or Suitability Landlord............. 17
Section 5.2. Hold Harmless Provisions..................................... 18
Section 5.3. Landlord's Repairs........................................... 18
Section 5.4. Responsibility for the Sprinkler System...................... 19
Section 5.5. Right to Inspect the Facility and the Equipment.............. 19
Section 5.6. Good Standing in the State................................... 19
Section 5.7. Agreement to Provide Information............................. 19
Section 5.8. Books of Record and Account; Financial Statements............ 19
Section 5.9. Compliance with orders....................................... 20
Section 5.10. Discharge of Liens and Encumbrances.......................... 20
i
Table of Contents
-----------------
(continued)
Page
----
ARTICLE VI ASSIGNMENT AND SUBLEASING; MORTGAGE AND PLEDGE OF INTEREST...... 21
Section 6.1. Assignment and Subleasing.................................... 21
ARTICLE VII EVENTS OF DEFAULT AND REMEDIES................................... 22
Section 7.1. Events of Default Defined.................................... 22
Section 7.2. Remedies on Default.......................................... 24
Section 7.3. Remedies Cumulative.......................................... 25
Section 7.4. Agreement to Pay Attorneys' Fees and Expenses................ 26
ARTICLE VIII RENEWAL OPTION................................................... 26
Section 8.1. Tenant's Renewal Option...................................... 26
ARTICLE IX PURCHASE OPTION.................................................. 27
Section 9.1. Facility Purchase Option..................................... 27
ARTICLE X RIGHT OF FIRST REFUSAL........................................... 30
Section 10.1. Right of First Refusal....................................... 30
ARTICLE XI MISCELLANEOUS.................................................... 32
Section 11.1. Surrender of Facility........................................ 32
Section 11.2. Notices...................................................... 32
Section 11.3. Binding Effect............................................... 33
Section 11.4. Severability................................................. 33
Section 11.5. Amendments, Changes and Modifications........................ 33
Section 11.6. Execution of Counterparts.................................... 33
Section 11.7. Applicable Law............................................... 33
Section 11.8. Table of Contents and Section Headings Not Controlling....... 33
Section 11.9. Estoppel Certificate......................................... 33
Section 11.10. Quiet Enjoyment.............................................. 34
Section 11.11. Security Deposit............................................. 34
Section 11.12. No Additional Waiver Implied By One Waiver................... 35
Section 11.13. Brokerage Agreement.......................................... 35
ii
THIS LEASE AGREEMENT, dated as of December 3, 1999, by and between EX-
CELL HOME FASHIONS, INC., a corporation organized and existing under the laws of
New York with an address at 295 Fifth Avenue, New York, New York 10016
("Landlord"), and ALADDIN MANUFACTURING CORPORATION, a corporation organized and
existing under the laws of Delaware with an address at 3090 Sugar Valley Road,
NW, Sugar Valley, GA 30746 ("Tenant"),
W I T N E S S E T H
-------------------
WHEREAS, Landlord desires to lease the real property described on
Exhibit A hereto, the existing building and other improvements thereon and the
Equipment (as hereinafter defined), and Tenant desires to hire such real
property, existing building and other improvements thereon and Equipment from
Landlord, upon the terms and conditions set forth in this Lease Agreement;
NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements of the parties hereto herein contained, the parties
hereto hereby covenant and agree as follows:
ARTICLE I
DEFINITIONS
The following words and terms as used in this Lease Agreement shall
have the following meanings:
"Landlord" means Ex-Cell Home Fashions, Inc., a corporation duly
----------
organized and existing under the laws of New York.
"Landlord's Plant" means Landlord's existing plant located on the Land
------------------
located in Bentonville, Arkansas.
1
"Condemnation" means the taking of title to, or the use of, property
--------------
under the exercise of the power of eminent domain by any governmental entity or
other Person acting under governmental authority.
"Equipment" means all machinery, equipment and other personal property
-----------
located at the Facility, except the computer equipment, checking stations, and
all equipment in the office areas.
"Facility" means the Land together with the Landlord's Plant
----------
(consisting of approximately 134,067 square feet), less the Storage Area.
"Land" means the interest in real estate leased pursuant to this Lease
------
Agreement as more particularly described on Exhibit A attached hereto.
"Lease Term" means the duration of the leasehold estate created by
------------
this Lease Agreement as specified in Section 2.2 hereof.
"Storage Area" means that area of the Plant identified on Exhibit B
--------------
attached hereto and consisting of approximately 3,600 square feet.
"Permitted Encumbrances" means (i) this Lease Agreement, (ii) utility,
------------------------
access and other easements and rights of way, restrictions and exceptions that
do not materially impair the utility or the value of the property affected
thereby for the purposes for which it is intended, (iii) mechanics',
materialmen's, warehousemen's, carriers' and other similar liens to the extent
permitted by this Lease Agreement hereof and (iv) liens for taxes at the time
not delinquent.
"Person" means an individual, partnership, corporation, trust or
--------
unincorporated organization, and a government or agency or political subdivision
thereof.
"Structural Repairs" means any repair that involves the substantial
--------------------
repair, renovation or restoration of a structural component of the Facility.
2
"Tenant" means Aladdin Manufacturing Corporation, a corporation duly
--------
organized under the laws of Delaware.
ARTICLE II
DEMISING CLAUSES AND RENTAL PROVISIONS
Section 2.1. Demise of Facility. Landlord hereby demises and leases the
------------------
Facility and the Equipment to Tenant and Tenant hereby hires and leases the
Facility and the Equipment from Landlord upon the terms and conditions of this
Lease Agreement.
Section 2.2. Duration of Lease Term. The Lease Term shall commence on
----------------------
December 3, 1999 (the "Term Commencement Date"), and end on December 31, 2002
(the "Expiration Date"), unless sooner terminated in accordance with the
provisions hereof.
Section 2.3. Rent. (a) Tenant shall pay to Landlord rent during the
-----
Lease Term at the rate of (i) Eighteen Cents per square foot per month or Two
Hundred Eighty-One Thousand Eight Hundred and Eight Dollars and 72/100
($281,808.72) per annum, payable in equal monthly installments of Twenty-Three
Thousand Four Hundred Eighty-Four Dollars and 06/100 ($23,484.06) for the
Facility (the "Fixed Rent"), and (ii) Thirty-six Thousand Dollars ($36,000.00)
per annum, payable in equal monthly installments of Three Thousand Dollars
($3000.00) (the "Equipment Rent"). Both Fixed Rent and Equipment Rent are
payable in advance on the first day of each month during such period.
(b) It is the intention of the parties that this is a gross lease,
without responsibility or cost to Tenant, except as expressly set out in this
Lease Agreement.
(c) Tenant agrees to make the payments of Fixed Rent and Equipment
Rent, without any further notice, in lawful money of the United States of
America as, at the time of payment, shall be legal tender for the payment of
public and private debts. In the event Tenant shall fail to timely make any
payment required in this Section 2.3, Tenant shall pay the same
3
together with interest thereon at the rate equal to the then higher of (i)
fifteen per centum (15%) or (ii) the prime rate as published in The Wall Street
Journal on the date such payments were due plus eight and one-half per centum
(8.5%) per annum, in either case as calculated from the date on which such
payment was due until the date on which such payment is made.
(c) In the event Tenant exercises its option for the Extended Term under
Article 8 of this Lease Agreement, Landlord shall have the right to increase the
base rent for the Extended Term in direct proportion to the three year aggregate
of the annual percentage increase in the level of the Consumer Price Index, All
Items, U.S. City Average, All Urban Consumers (1982-1984=100), published by the
Bureau of Labor Statistics, U.S. Department of Labor (the "B.L.S. Index"), as
published during the preceding three years.
It is understood that the B.L.S. Index is now being published monthly
by the Bureau of Labor Statistics of the U.S. Department of Labor. Should said
Bureau of Labor Statistics change the manner of computing the B.L.S. Index, the
Bureau shall be requested to furnish a conversion factor designed to adjust the
B.L.S. Index to the one previously in use, and adjustment to the new Index shall
be made on the basis of such conversion factor. Should the publication of a
B.L.S. Index be discontinued by said Bureau of Labor Statistics, then such other
index as may be published by such Bureau most nearly approaching said
discontinued B.L.S. Index shall be used in making the adjustments herein
provided. Should said Bureau discontinue the publication of any index
approximating the B.L.S. Index, then such index as may be published by another
United States Governmental Agency as most nearly approximates the B.L.S. Index
shall govern and be substituted as the index to be used, subject to the
application of an appropriate conversion factor to be furnished by the
Governmental Agency publishing the adopted index. If such Governmental Agency
will not furnish such conversion factor, then the
4
parties shall agree upon a conversion factor, or a new index, and in the event
an agreement cannot be reached as to such conversion factor or such new index,
then the selection of a new index approximating as nearly as can be the B.L.S.
Index shall be determined by arbitration in accordance with the Rules of the
American Arbitration Association and the index selected in such arbitration
shall be binding upon the parties hereto.
ARTICLE III
MAINTENANCE, USE, MODIFICATIONS, TAXES AND INSURANCE
Section 3.1. Maintenance, Use, and Modifications of Facility by Tenant.
---------------------------------------------------------
(a) Tenant agrees that during the Lease Term it will at its own expense (i)
keep the Facility and the Equipment in a safe condition; (ii) make all necessary
nonstructural repairs and replacements to the Facility and the Equipment
(whether ordinary or extraordinary, foreseen or unforeseen), which repairs and
replacements shall be of a quality or class equal to the original work or
construction; and (iii) make all Structural Repairs necessitated by or arising
out of any act, failure to act or negligence of Tenant. Tenant shall use and
operate the Facility and the Equipment for the manufacturing, assembling,
warehousing and wholesale distribution of pillow filling and other pillow
filling products and for other uses reasonably related to the business of
assembling, warehousing and the wholesale distribution of pillow filling and for
no other purpose, unless Landlord consents in writing to other uses. If
Landlord consents to a different use, and such use is lawful, Tenant shall be
responsible for any additional costs associated with such different use,
including, but not limited to insurance costs. Landlord shall deliver the
Facility to Tenant clean and free of debris on the Term Commencement Date and
warrants to Tenant that all aspects of the building to be maintained and
repaired by Tenant shall be in good operating condition and repair as of the
Term Commencement Date.
5
(b) In the event that Tenant shall at any time during the term of
this Lease receive a notice, order, or violation to the effect that Tenant's use
and operation of the Facility for the manufacturing, assembling, warehousing and
wholesale distribution of pillow filling and other pillow filling products is
not permitted in the Facility under the provisions of the zoning code of the
Town of Bentonville as existing as of the date of this Lease Agreement (the
"Zoning Code"), then Tenant shall promptly give notice thereof to Landlord.
Following receipt of such notice from Tenant, Landlord shall have a period of
180 days in order to obtain a variance, special exception, or otherwise cure or
dismiss the notice, violation or order. During such 180 day period Landlord
agrees to use good faith efforts to cure or remove such notice, violation or
order and Tenant agrees to cooperate with Landlord (by joining in applications,
supplying information, attending hearings and otherwise as may be necessary).
If Landlord does not notify Tenant within such 180 day period that Landlord has
cured or removed, or has arranged to cure or remove, such notice, violation or
order, then Tenant shall have a right to terminate this Lease by notice to
Landlord within 10 days following the end of such 180 day period, which notice
shall specify a date for such termination which shall be not less than 30 days
following the date of Tenant's notice. In such event, the date set forth in
Tenant's notice shall be substituted for the Expiration Date provided for herein
and the Tenant shall vacate and surrender the Facility on such Expiration Date
in accordance with the terms of this Lease Agreement. Notwithstanding the
foregoing, Tenant shall not have the right to terminate this Lease Agreement
pursuant to this paragraph if the notice, order or violation arises as a result
of Tenant's breach or violation of any law, rule or regulation other than the
Zoning Code. Provided that Landlord has complied with its obligations pursuant
to this paragraph, Tenant's right to terminate this Lease Agreement pursuant to
this paragraph because Tenant's use and operation of the Facility for the
purposes provided for
6
in this paragraph is not permitted by the Zoning Code shall be Tenant's sole
remedy and Tenant hereby waives, and releases Landlord with respect to, any and
all other claims for damages, equitable relief or otherwise.
(c) Any structural additions, modifications or improvements to the
Facility or any part thereof made by Tenant must be in accordance with plans and
specifications approved in writing in advance by Landlord, which consent shall
not be unreasonably withheld or delayed. Tenant shall pay to Landlord as
additional rent within 20 days after demand therefor: (i) Landlord's reasonable
expenses incurred as a result of having the plans, specifications, work-in-
progress and as-built plans reviewed by an architect or engineer and (ii)
reasonable attorneys' fees and expenses arising in connection with any such
structural additions, modifications or improvements to the Facility. All such
structural additions, modifications or improvements so made by Tenant shall
become a part of the Facility and shall remain upon and be surrendered with the
Facility at the end of the Lease Term.
(d) Tenant shall use the Equipment in a careful and proper manner and
shall comply with and conform to all national, state, municipal, police and
other laws, ordinances and regulations in anywise relating to the possession,
use or maintenance of the equipment. If at any time during the term hereof
Landlord supplies Tenant with labels, plates or other markings stating that the
equipment is owned by Landlord, Tenant shall affix and keep the same upon a
prominent place on the equipment.
(e) If Tenant fails after ten days notice to proceed with due
diligence to make repairs or replacements which Tenant is required to make
hereunder, the same may be made by Landlord at the expense of Tenant, and the
expenses thereof incurred by Landlord shall be
7
collectible as Additional Rent and payable by Tenant within 20 days following
rendition of a bill or statement therefor.
(f) All repairs and replacements shall be done in a good and
workmanlike manner and shall at all times comply with laws, rules, ordinances,
orders, codes and regulations of governmental, quasi-governmental and regulatory
authorities, and all requirements of insurance carriers issuing policies
covering the Facility and the Equipment and the Board of Fire Underwriters.
(g) Tenant agrees that it will not, either directly or indirectly,
use any contractors and/or labor and/or materials if the use of such contractors
and/or labor and/or materials would or will create any difficulty with other
contractors and/or labor engaged by Tenant or Landlord or others in the
maintenance and/or operation of any part of the Facility or the Equipment.
Tenant shall, before making any repairs or replacements, at its sole cost and
expense, obtain all permits, approvals and certificates required by any
governmental or quasi-governmental bodies and (upon completion) certificates of
final approval and shall deliver promptly duplicates of all such permits,
approvals and certificates to Landlord, and Tenant agrees to carry, and will
cause Tenant's contractors and sub-contractors to carry such workers'
compensation, builder's risk, general liability, personal and property damage
insurance as Landlord may reasonably require.
Section 3.2. Installation of Tenant-Owned Equipment. Tenant from time to
--------------------------------------
time may install its own machinery, equipment or other personal property in the
Facility (which may be attached or affixed to the Facility), and such machinery,
equipment or other personal property shall not become, or be deemed to become, a
part of the Facility. Tenant from time to time may remove or permit the removal
of such machinery, equipment and other personal property from
8
the Facility, provided that any such removal of such machinery, equipment or
other personal property shall not adversely affect the structural integrity of
the Facility or impair the overall operating efficiency of the Facility and
provided further that if any damage is occasioned to the Facility by such
removal, Tenant agrees to promptly repair such damage at its own expense.
Section 3.3. Taxes, Assessments and Utility Charges. Tenant agrees to pay,
--------------------------------------
(i) all taxes and governmental charges of any kind whatsoever which may at any
time be assessed or levied against or with- respect to the Facility and any
machinery, equipment or other property installed or brought by Landlord or
Tenant therein or thereon and the employees of Tenant or Landlord located at or
assigned to the Facility, including without limiting the generality of the
foregoing any sales or use taxes and any taxes levied upon or with respect to
the income or revenues of Tenant from the Facility, (ii) all utility and other
charges, including, without limitation, "service charges", incurred or imposed
for the operation, maintenance, use, occupancy, upkeep and improvement of the
Facility, and (iii) all assessments and charges of any kind whatsoever made by
any governmental body for public improvements.
Taxes and governmental charges shall be deemed to exclude any payments
in lieu of, addition to, or in partial or complete substitution for real estate
related taxes, including, without limitation, (i) taxes, assessments, levies,
impositions or charges (special or otherwise) wholly or partially as a capital
levy or otherwise on the rents received from the Facility, (ii) taxes,
assessments, levies, impositions, or charges (special or otherwise) measured by,
or based in whole or in part upon the Facility and imposed upon the Landlord,
(iii) license fees measured by the rent payable by the tenants in the Facility
to the Landlord, and (iv) such other additional or substitute taxes,
assessments, levies, impositions, or charges (special or otherwise).
9
Section 3.4. Insurance Required. At all times throughout the Lease Term,
------------------
Tenant shall maintain insurance, except general facility insurance, against such
risks and for such amounts as are customarily insured against by businesses
operating facilities of like size and type as the Facility in the manner and for
the purposes for which the Facility will be operated by Tenant under this Lease
Agreement, paying, as the same become due and payable, all premiums in respect
thereto, including, but not necessarily limited to:
(a) business interruption insurance or rent insurance, sufficient to
cover unabated rent payments in the event of a casualty.
(b) worker's compensation insurance, disability benefits insurance,
and each other form of insurance which Landlord or Tenant is required by law to
provide, covering loss resulting from injury, sickness, disability or death of
employees of Landlord or Tenant who are located at or assigned to the Facility;
and
(c) insurance protecting Landlord and Tenant against loss or losses
from liabilities imposed by law or assumed in any written contract and arising
from personal injury and death or damage to the property of others caused by any
accident or occurrence with limits of not less than $5,000,000 per accident or
occurrence on account of personal injury, including death resulting therefrom
and damage to the property of others.
(d) Tenant shall keep the Equipment insured against all risks of loss
or damage from every cause whatsoever for not less than the full replacement
value thereof as determined by Landlord and shall carry public liability and
property damage insurance covering the Equipment.
Section 3.5. Additional Provisions Respecting Insurance. (a) All
------------------------------------------
insurance required by this Article shall be procured and maintained with
responsible insurance companies which are (i)
10
financially-sound and generally-recognized and with a Best's rating of A or
better, (ii) approved by Landlord and (iii) authorized to write such insurance
in the State of Arkansas. The insurance coverage shall be of a type and scope
and in the amounts as shall be acceptable to Landlord. Such insurance may not
be written with deductible amounts in excess of such deductible amounts as
Landlord may have agreed to in advance. All policies evidencing such insurance
shall provide for payment of losses to Landlord and Tenant, as their respective
interests may appear.
(b) All policies of insurance required by this Article, or a
certificate or certificates of the insurers that such insurance is in force and
effect, or other evidence of such insurance satisfactory to Landlord, shall be
deposited with Landlord prior to Tenant's taking possession of the Facility and
the Equipment. Tenant shall deliver to Landlord on or before the first day of
each calendar year thereafter certificates dated not earlier than the
immediately preceding November 1 reciting that there is in full force and effect
with a term covering at least the next succeeding calendar year, insurance in
the amounts and of the types required by this Article. Prior to expiration of
any such policy, Tenant shall furnish Landlord satisfactory evidence that the
policy has been renewed or replaced.
(c) All policies of insurance procured by Tenant shall contain
endorsements providing that (i) such policies may not be materially changed,
amended, reduced, cancelled (including for nonpayment of premium) or allowed to
lapse with respect to the Landlord except after 60 days' prior notice from the
insurance company to each, sent by registered or certified mail, return receipt
requested to the addresses and in the manner then provided in this Lease
Agreement for notices; and (ii) Tenant shall be solely responsible for the
payment of all premiums under such policies and the Landlord shall have no
obligation for the payment thereof notwithstanding that the Landlord is or may
be named as an insured. Any endorsements to any
11
such policies shall be so deposited with the Landlord upon issuance thereof and
each renewal or replacement of a policy shall be so deposited with the Landlord
at least 20 days prior to the expiration of such policy.
(d) Tenant shall not take out separate insurance concurrent in form
or contributing in the event of loss with that required (or which may reasonably
be required) pursuant to this Section to be furnished by Tenant unless Landlord
are included therein as an insured, with all losses payable thereunder as
provided in this Section. Tenant shall immediately notify the Landlord of the
taking out of any such separate insurance and shall deliver the policy or
policies as herein provided.
(e) Tenant shall use its best efforts to include in each of its
insurance policies (and, with respect to any equipment in the Facility leased by
Tenant, in the insurance policies covering such equipment carried by Tenant or
the lessors of such equipment) covering loss, damage or destruction by fire or
other insured casualty, a waiver of the insurer's right of subrogation against
the Landlord, or if such waiver should be unobtainable or unenforceable (i) an
express agreement that such policy shall not be invalidated if the insured
waives or has waived before the casualty the right of recovery against any party
responsible for a casualty covered by the policy, or (ii) any other form of
permission for the release of the Landlord.
(f) Tenant agrees to permit any representatives of insurance
companies insuring the Facility or insuring any items required by this Lease
Agreement to inspect the Facility pursuant to Section 5.5 of this Lease
Agreement. Tenant further agrees to comply with any and all recommendations
made by such representatives in connection with inspections of the Facility.
12
Section 3.6. Right of Landlord to Pay Insurance Premiums and Other Charges.
-------------------------------------------------------------
If Tenant fails (i) to maintain any insurance required to be maintained by this
Article or (ii) to make any other payment required to be made by it under this
Lease Agreement, Landlord may pay such premium for such insurance, or make such
other payment. No such payment by Landlord shall affect or impair any rights of
Landlord hereunder arising in consequence of such failure by Tenant. Tenant
shall reimburse the Landlord for any amount so paid by Landlord pursuant to this
Section, together with interest thereon at the rate provided for in Section
2.3(c).
ARTICLE IV
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 4.1. Damage or Destruction. (a) If the Facility shall be damaged
---------------------
or destroyed (in whole or in part) at any time during the Lease Term:
(i) Landlord shall have no obligation to Tenant to replace, repair
of restore the Facility, except if caused by Landlord's willful misconduct;
(ii) there shall be no abatement or reduction in the Fixed Rent or
Equipment Rent, except if caused by Landlord's willful misconduct;
(iii) Tenant shall promptly give written notice of such damage or
destruction to Landlord, and
(iv) Tenant shall promptly replace, repair, rebuild or restore the
Facility to substantially the same condition and value as an operating
entity as existed prior to such damage or destruction, in accordance with
plans and specifications approved in writing in advance by Landlord;
provided, however, that if by reason of the extent of such damage or
-------- -------
destruction the provisions of section 4.1(b) hereof are applicable, Tenant
shall not commence such replacement, repair, rebuilding or restoration
until (i) Landlord notifies Tenant that Landlord does not intend to give
13
to Tenant the notice of termination provided for under Section 4.1(b)
hereof or (ii) the time for the Landlord to give the notice of termination
provided for in Section 4.1(b) lapses. Landlord will make available to
Tenant so much of the net proceeds of the insurance maintained under
Article III hereof as is necessary to pay the costs of such replacement,
repair, rebuilding or restoration of the Facility, such proceeds to be made
available only after actual receipt thereof by Landlord and as the work
progresses, subject, however, to customary retainages and submission to
------- -------
Landlord of customary documentation to establish the percentage of
completion and the absence of liens.
(v) In the event the net proceeds of such insurance are not
sufficient to pay in full the costs of such replacement, repair, rebuilding
or restoration, Tenant shall nonetheless complete the work thereof and pay
from its own moneys that portion of the costs thereof in excess of such
insurance proceeds.
(vi) All such replacements, repairs, rebuilding or restoration made
pursuant to this Section 4.1, whether or not requiring the expenditure of
Tenant's own money, shall automatically become a part of the Facility and
be subject to this Lease Agreement as if the same were specifically
described herein.
(vii) Any balance of such insurance proceeds remaining after payment
of all the costs of such replacement, repair, rebuilding or restoration
returned to Landlord.
(viii) Tenant shall be entitled to the proceeds of any insurance or
portion thereof made for damage to any property which, at the time of such
damage, is not part of the Facility and is owned by Tenant.
14
(b) Notwithstanding the provisions of Section 4.1(a) above, if more
than 30% of the monetary value of the Facility (exclusive of excavations and
foundations) as reasonably determined by Landlord shall be damaged or destroyed
and in Landlord's judgment it is not practicable or desirable to replace,
repair, rebuild or restore the Facility, Landlord shall have the right to
terminate this Lease Agreement and the leasehold estate created hereby by notice
in writing given to Tenant within 30 days after the date of such damage or
destruction, in which case (i) this Lease Agreement and the leasehold estate
created hereby shall terminate as of the date such notice is given; (ii) all
Fixed Rent, additional rent, and other rents, taxes and charges hereunder shall
be prorated and paid to the date of such termination; and (iii) all of the
proceeds of insurance with respect to such damage or destruction shall be paid
to Landlord and Tenant shall have no claim thereto.
(c) Tenant hereby assumes and shall bear the entire risk of loss and
damage to the Equipment from any and every cause whatsoever. No loss or damage
to the equipment or any part thereof shall impair any obligation of lessee under
this Lease Agreement which shall continue in full force and effect, except if
caused by Landlord's willful misconduct.
Section 4.2. Condemnation. (a) If at any time during the Lease Term any
-------------
part of title to, or the use of, the Land shall be taken by Condemnation but
such taking shall not (i) include the Plant or (ii) materially interfere with
the Tenant's use or operation of the Plant, then:
(i) Landlord shall have no obligation to Tenant to restore or
replace the Facility;
(ii) there shall be no abatement or reduction in the Fixed
Rent or Equipment Rent;
(iii) The entire proceeds of any award in Condemnation,
whether the Condemnation be of the whole or any part of the Facility,
shall belong solely to Landlord and Tenant hereby assigns all of its
rights in and to such award to
15
Landlord. Landlord will make available to Tenant so much of the net
proceeds of such award as is necessary to pay the costs of such
restoration as may be necessary for the continued use and operation of
the Plant, such proceeds to be made available only after actual
receipt thereof by Landlord and as such restoration progresses,
subject, however, to customary retainages and submission to Landlord
------- -------
of customary documentation to establish the percentage of completion
and the absence of liens. Restoration of the Facility shall be in
accordance with plans and specifications approved in writing by
Landlord and on such other terms as shall be approved in writing by
Landlord.
(iv) The restorations to the Facility shall automatically become
part of the Facility and be subject to this Lease Agreement as if the
same were specifically described herein.
(v) Any balance of the proceeds of any Condemnation award
remaining after payment of all costs of such restoration shall be paid
to Landlord.
(b) Notwithstanding the provisions of Section 4.2(a) above, if at any
time during the Lease Term a part of the Plant or the Land beneath the Plant
shall be taken by Condemnation and as a result of such taking by Condemnation,
part of the Plant is no longer useable by Tenant, then, effective as of the date
of vesting of title, the Fixed Rent shall be abated in an amount apportioned
according to the area of the Facility so condemned or taken. If at any time
during the Lease Term a part of the Plant or the Land beneath the Plant shall be
taken by Condemnation and as a result of such taking by Condemnation Tenant's
use or operation of the Plant is materially impaired, then, effective as of the
date of vesting of title (i) this Lease Agreement and the leasehold estate
created hereby shall terminate, (ii) all Fixed Rent, additional
16
rent and other rents, and charges herewith shall be prorated and paid to the
date of termination, and (iii) Landlord shall retain the full amount of any
Condemnation award and Tenant shall have no claim thereto.
(c) In the event the entire Facility shall be taken by Condemnation,
then, effective as of the date of vesting of title (i) this Lease Agreement and
the leasehold estate created hereby shall terminate, (ii) all Fixed Rent,
additional rent and other rents, and charges herewith shall be prorated and paid
to the date of termination, and (iii) Landlord shall retain the full amount of
any Condemnation award and Tenant shall have no claim thereto.
(d) Notwithstanding the provisions of Section 4.2(a) above, if more
than 30% of the monetary value of the Facility (exclusive of excavations and
foundations) shall be taken by Condemnation and in Landlord's reasonable
judgment it is not practicable or desirable to restore the Facility, Landlord
shall have the right to terminate this Lease Agreement and the leasehold estate
created hereby by notice in writing given to Tenant at least 90 days (or such
lesser time as may have been made available by such condemning authorities)
prior to the date possession of the Facility or the part thereof taken by
Condemnation is surrendered to the condemning authorities, in which case (i)
this Lease Agreement and the leasehold estate created hereby shall terminate as
of the date such possession is surrendered to the' condemning authorities; (ii)
all rents and other charges shall be prorated and paid to such date of
termination; and (iii) the entire Condemnation award shall be paid to Landlord
and Tenant shall have no claim thereto.
ARTICLE V
SPECIAL COVENANTS
Section 5.1. No Warranty of Condition or Suitability Landlord. Landlord
------------------------------------------------
makes no warranty, either express or implied, as to the condition, title,
design, operation, merchantability
17
or fitness of the Facility or the Equipment or that they are or will be suitable
for Tenant's purposes or needs.
Section 5.2. Hold Harmless Provisions. Tenant hereby releases Landlord
------------------------
from, agrees that Landlord shall not be liable for, and agrees to indemnify and
hold Landlord harmless from and against, any and all (i) liability for loss or
damage to property or injury to or death of any and all persons that may be
occasioned by any cause whatsoever pertaining to the Facility or the Equipment
or arising by reason of or in connection with the occupation or the, use thereof
or the presence on, in or about the Facility or the Equipment, except if caused
by Landlord's willful misconduct, and (ii) liability arising from or expense
relating to the construction, renovation, equipping, owning and leasing of the
Facility, and all causes of action and attorneys' fees and any other expenses
incurred in defending any suits or actions which may arise as a result of any of
the foregoing, provided that any such losses, damages, liabilities or expenses
of Landlord are not incurred or do not result from the willful wrongdoing of
Landlord. Nothing contained herein shall inure to the benefit of any insurance
company or insurer by way of subrogation or otherwise.
Section 5.3. Landlord's Repairs. (a) Landlord agrees that, during the
------------------
Lease Term, it will make all necessary Structural Repairs to the Facility;
provided, however, that Tenant shall be responsible for those Structural Repairs
-------- -------
caused by or arising out of any act, failure to act or negligence of Tenant.
(b) Landlord shall be responsible for the repairs necessary to
maintain: (i) the leak-free condition of the roof of the Plant for the Lease
Term; provided, however, that Tenant shall be responsible for those repairs
-------- -------
caused by or arising out of any act, failure to act or negligence of Tenant.
18
Section 5.4. Responsibility for the Sprinkler System. Tenant agrees that
---------------------------------------
during the Lease Term it will at its own expense make all necessary repairs and
replacements to the sprinkler system (the "Sprinkler System"), in a timely
manner, and Tenant will provide Landlord with notice of such repairs and
replacements. Tenant further agrees that it will, throughout the Lease Term,
comply with all statutes, rules, regulations, permits, licenses, and
requirements of all federal, state, county, municipal and other governments,
which now or at any time hereafter may be applicable to the Sprinkler System.
Section 5.5. Right to Inspect the Facility and the Equipment. Landlord and
-----------------------------------------------
its respective duly authorized agents, including, but not limited to insurers,
shall have the right at all reasonable times to inspect the Facility.
Section 5.6. Good Standing in the State. Throughout the Lease Term, Tenant
--------------------------
shall continue to maintain its corporate existence and be in good standing in
the State of Arkansas.
Section 5.7. Agreement to Provide Information. Tenant agrees, on each
--------------------------------
anniversary of the Lease Commencement Date and whenever requested by Landlord,
to provide and certify or cause to be provided and certified financial
statements and such additional information concerning Tenant, its finances, its
banking relationships and other topics as Landlord from time to time reasonably
considers necessary or appropriate, including, without limitation, such
information as reasonably may be necessary to enable them or either of them to
make any reports required by law or governmental regulation. Tenant shall advise
Landlord of any change in Tenant's principal banking relationships.
Section 5.8. Books of Record and Account; Financial Statements. Tenant
-------------------------------------------------
agrees to maintain proper accounts, records and books in which full and correct
entries shall be made, in accordance with generally accepted accounting
principles, of all business and affairs of Tenant. Within 120 days after the
close of each fiscal year of Tenant during the Lease Term, Tenant shall
19
furnish to Landlord a copy of Tenant's certified annual financial statements for
its immediately preceding fiscal year, audited by a firm of independent public
accountants of recognized standing, selected by Tenant.
Section 5.9. Compliance with orders. Ordinances, Etc. Tenant agrees
----------------------------------------
that it will, throughout the Lease Term, comply with all statutes, codes, laws,
acts, ordinances, orders, judgments, decrees, injunctions, rules, regulations,
permits, licenses, authorizations, directions and requirements of all federal,
state, county, municipal and other governments, departments, commissions,
boards, companies or associations insuring the premises, courts, authorities,
officials and officers, foreseen or unforeseen, ordinary or extraordinary, which
now or at any time hereafter may be applicable to the Facility or any part
thereof or the Equipment, or to any use, manner of use or condition of the
Facility or any part thereof or the Equipment, including, without limiting the
generality of the foregoing, all Arkansas State and Occupational Safety and
Health Act ("OSHA") regulations governing the pillow filling in plants.
Section 5.10. Discharge of Liens and Encumbrances. Tenant shall not
-----------------------------------
permit or create or suffer to be permitted or created any lien, except for
Permitted Encumbrances, upon the Facility or any part thereof or the Equipment
by reason of any labor, services or materials rendered or supplied or claimed to
be rendered or supplied with respect to the Facility or any part thereof or the
Equipment. If any such lien is filed against the Facility or the Equipment
(other than liens arising from acts or omissions of Landlord or judgments
against Landlord), Tenant shall discharge the same within thirty days of such
filing and at its own expense. If Tenant fails to discharge any such lien within
thirty days of filing, Landlord may discharge the same at the expense of Tenant
and Tenant shall pay as additional rent the expenses thereof incurred by
Landlord with interest thereon as herein provided.
20
ARTICLE VI
ASSIGNMENT AND SUBLEASING; MORTGAGE
AND PLEDGE OF INTEREST
Section 6.1. Assignment and Subleasing. Tenant shall not assign this
--------------------------
Lease Agreement in whole or in part nor sublease the Facility or the Equipment
in part without the prior written consents of the Landlord, which consent shall
not be unreasonably withheld or delayed. In addition, Tenant may sublease the
Facility to one of its subsidiaries or divisions without Landlord's permission,
provided, however, Tenant shall provide Landlord with prior written notice of
-------- -------
such sublease. Prior to requesting the approval of Landlord to an assignment or
subletting of the Facility, as hereinafter provided, Tenant shall advise
Landlord of (i) the name and address of the proposed subtenant or assignee; (ii)
the terms, conditions and consideration of the proposed subletting or
assignment; (iii) the nature and character of the business of the proposed
subtenant or assignee and of its proposed use of the Facility; and (iv) current
financial information and any other information as Landlord may reasonably
request with respect to the proposed subtenant or assignee. Tenant shall pay to
Landlord as additional rent, within twenty day after notice and demand therefor,
Landlord's reasonable attorneys' fee incurred as a result of having any proposal
reviewed or consent documented. In the case of an assignment, Landlord may
withhold its consent if the nature and character or the financial condition of
the proposed assignee is not equal to or better than that of Tenant. In the
event Tenant proposes to sublease more than 75% of the Facility for all or
substantially all of the duration of the Lease Term, Landlord may withhold its
consent and require that such transaction be structured as an assignment:
(1) No assignment or sublease shall relieve Tenant from primary
liability for any of its obligations hereunder;
21
(2) The assignee or sublessee shall assume the obligations of Tenant
hereunder to the extent of the interest assigned or subleased;
(3) Tenant shall, within ten days after the delivery thereof, furnish
or cause to be furnished to the Landlord a true and complete copy of each such
assignment or sublease, as the case may be, and the instrument of assumption;
and
(4) Tenant shall pay to Landlord as additional rent, as and when paid
by any subtenant to Tenant, one-half of any rents, additional charges or other
consideration payable under the sublease to Tenant by the subtenant which is in
excess of the Fixed Rent accruing during the term of the sublease in respect of
the subleased space (at the rate per square foot payable by Tenant hereunder)
pursuant to the terms hereof.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.1. Events of Default Defined. (a) The following shall be
-------------------------
"Events of Default" under this Lease Agreement and the term "Event of Default"
or "Default" shall mean, whenever they are used in this Lease Agreement, any one
or more of the following events:
(1) The failure by Tenant to pay the Fixed Rent and Equipment Rent
within five days of the date when due;
(2) The failure by Tenant to pay any additional rent within ten days
after notice and demand by Landlord to Tenant;
(3) The failure by Tenant to observe or perform any covenant,
condition or agreement hereunder on its part to be observed or performed (except
obligations referred to in
22
Sections 7.1(a) (1) and (2) above) for a period of thirty days after written
notice, specifying such failure and requesting that it be remedied, given to
Tenant by Landlord;
(4) The filing by Tenant of a voluntary petition in bankruptcy, or
the failure by Tenant within sixty days to lift any execution, garnishment or
attachment of such consequence as will impair its ability to carry on its
operations at the Facility, or the commission by Tenant of any act of
bankruptcy, or the adjudication of Tenant as a bankrupt, or the assignment of
assets by Tenant for the benefit of its creditors, or the entry by Tenant into
an agreement of composition with its creditors, or the approval by a court of
competent jurisdiction of a petition applicable to Tenant in any proceeding for
its reorganization instituted under the provisions of any state or federal
bankruptcy or similar law, or appointment by order, judgment or decree of a
court of competent jurisdiction of a receiver of the whole or a substantial
portion of the properties of Tenant (unless such receiver is removed or
discharged within sixty days of the date of his qualification).
(b) Notwithstanding the provisions of Section 7.1(a), if by reason of
force majeure either party hereto shall be unable in whole or in part to carry
out its obligations under this Lease Agreement and if such party shall give
notice and full particulars of such force majeure in writing to the other party
within a reasonable time after the occurrence of the event or cause relied upon,
the obligations under this Lease Agreement of the party giving such notice, so
far as they are affected by such force majeure, shall be suspended during the
continuance of the inability, which shall include a reasonable time for the
removal of the effect thereof. The suspension of such obligations for such
period pursuant to this subsection (b) shall not be deemed an event of default
under this Section 7.1. Notwithstanding anything to the contrary in this
subsection (b), an event of force majeure shall not excuse, delay or in any way
diminish the
23
obligations of Tenant to pay the Fixed Rent and Equipment Rent when due or to
provide the indemnity required by Section 5.2 hereof. The term "force majeure"
as used herein shall include, without limitation, acts of God, strikes, lockouts
or other industrial disturbances, acts of public enemies, orders of the State or
any of their departments, agencies, governmental subdivisions, or officials, or
any civil or military authority, insurrections, riots, epidemics, landslides,
lightning, earthquakes, fire, hurricanes, storms, floods, washouts,
disturbances, explosions, breakage or accident to machinery, transmission pipes
or canals, partial or entire failure of utilities, or any other cause or event
not reasonably within the control of the party claiming such inability. It is
agreed that the settlement of strikes, lockouts and other industrial
disturbances shall be entirely within the discretion of the party having
difficulty, and the party having difficulty shall not be required to settle any
strike, lockout and other industrial disturbances by acceding to the demands of
the opposing party or parties.
Section 7.2. Remedies on Default. (a) Whenever any Event of Default
-------------------
shall have occurred and be continuing, Landlord may take any one or more of the
following steps:
(1) Declare, by written notice to Tenant, to be immediately due and
payable, whereupon the same shall become immediately due and payable to the
extent permitted by law all unpaid installments of Fixed Rent or Equipment Rent.
(2) Re-enter and take possession of the Facility (without terminating
this Lease Agreement and without being liable for any prosecution or damages
therefor) and sublease the Facility for the account of Tenant, holding Tenant
liable for the amount, if any, by which the aggregate of the Fixed Rent payable
by Tenant hereunder exceeds the aggregate of the rents and other amounts
received from the sublessee under such sublease.
24
(3) Terminate the Lease Term and this Lease Agreement and, without
being liable for any prosecution or damages therefor, exclude Tenant from
possession of the Facility and use its best efforts to lease the Facility to
another Person for the account of Tenant, holding Tenant liable for the amount,
if any, by which the aggregate of the Fixed Rent payable by Tenant hereunder
exceeds the aggregate of the rents and other amounts received from such other
Person under the new lease.
(4) Take any other action at law or in equity which may appear to
Landlord necessary or desirable to collect the payments then due or thereafter
to become due hereunder, to secure possession of the Facility, and to enforce
the obligations, agreements or covenants of Tenant under this Lease Agreement.
(b) In the event the Facility is subleased or leased to another
Person pursuant to Section 7.2 (a) (2) or (3) hereof, Landlord may (but shall be
under no obligation to) make such repairs or alterations in or to the Facility
and the Equipment as it may deem necessary or desirable for the implementation
of such sublease or lease and Tenant shall be liable and agrees to pay the costs
of such repairs or alterations and the expenses incidental to the effecting of
such sublease or lease, together with interest thereon at the rate herein
provided, notwithstanding that this Lease Agreement may have been terminated
pursuant to Section 7.2(a)(3) hereof.
Section 7.3. Remedies Cumulative. No remedy herein conferred upon or
-------------------
reserved to Landlord is intended to be exclusive of any other available remedy,
but each and every such remedy shall be cumulative and in addition to every
other remedy given under this Lease Agreement or now or hereafter existing at
law or in equity. No delay or omission to exercise any right or power accruing
upon any default shall impair any such right or power or shall be construed to
be a waiver thereof, but any such right and power may be exercised from time to
25
time and as often as may be deemed expedient. In order to entitle Landlord to
exercise any remedy reserved to it in this Article, it shall not be necessary to
give any notice, other than such notice as may be herein expressly required in
this Lease Agreement.
Section 7.4. Agreement to Pay Attorneys' Fees and Expenses. In the
----------------------------------------------
event Tenant should default under any of the provisions of this Lease Agreement
and Landlord should employ attorneys or incur other expenses for the collection
of amounts payable hereunder or the enforcement of performance or observance of
any obligations or agreements on the part of Tenant herein contained, Tenant
shall, on demand therefor, pay to Landlord the reasonable fees of such attorneys
and such other expenses so incurred.
ARTICLE VIII
RENEWAL OPTION
Section 8.1. Tenant's Renewal Option. Tenant shall have the option, to
-----------------------
be exercised as hereinafter provided, to extend the term of this Lease Agreement
for succeeding periods of one year (each, an "Extended Term") upon the following
terms and conditions:
(A) That at the time of the exercise of such option and the
commencement of the Extended Term, Tenant shall not be in default in the
performance of any of the terms, covenants or conditions herein contained.
(B) That at the time of the exercise of such option and the
commencement of the Extended Term, the Tenant named herein or any permitted
assignee of Tenant shall be in actual occupancy of the entire Facility.
(C) Except as provided herein, that the extension shall be upon
terms, covenants and conditions as mutually agreed between the parties.
(E) Tenant shall exercise its right to extend the term of this lease
by notifying Landlord of Tenant's election to exercise such option not later
than six months prior to the
26
Expiration Date or the end of any Renewal Term. Upon the giving of such notice,
this Lease Agreement shall be deemed extended for the specified period, subject
to the provisions of this Article, without execution of any further instrument.
In the event that Tenant exercises the option provided for in this Article, then
the term "Lease Term" as used herein shall be deemed to include the Extended
Term.
(F) Time shall be of the essence with respect to the exercise by
Tenant of the option set forth in this Article.
ARTICLE IX
PURCHASE OPTION
Section 9.1. Facility Purchase Option. (a) Provided that Tenant
-------------------------
shall (i) not be in default in the performance of any of the terms, covenants or
conditions herein contained on the date the option shall be exercised and on the
date title shall be transferred pursuant to this Article, and (ii) that Tenant
herein named, or any permitted assignee of Tenant shall be in occupancy of the
entire Facility the date the option shall be exercised and on the date title
shall be transferred pursuant to this Section, Tenant shall have the option to
purchase the Facility upon terms and subject to the conditions and at the
purchase price hereinafter set forth. Tenant shall exercise the option provided
for by first giving Landlord notice of its election to so exercise the option
(the "First Notice"). In the event Tenant gives such First Notice, then the
purchase price shall be determined as provided in paragraph (c) below. Once the
purchase price has been finally determined, then Tenant shall within 60 days of
such determination notify Landlord that Tenant is proceeding with the purchase
(the "Second Notice") and in such Second Notice set a date for closing which is
at least 30 days but not more than 45 days following the date of such Second
Notice. In the event that Tenant fails to give the Second Notice on a timely
basis, then (i) Tenant shall pay to Landlord within 10 days following Landlord's
demand therefor Landlord's
27
appraisal costs and additional costs incurred in determining the purchase price
all costs and (which payment by Tenant to Landlord shall constitute additional
rent) and (ii) this Lease Agreement, including but not limited to Tenant's
rights pursuant to this Article, shall remain in full force and effect.
(b) The purchase price shall be the fair market value of the
Facility, excluding any leasehold improvements made by Tenant, determined as
follows:
(i) Within 20 days following the giving of the First Notice,
Landlord and Tenant shall each designate an appraiser who shall be an
M.A.I. in good standing having at least 10 years of experience in
appraising buildings in Benton County, Arkansas. The two appraisers so
chosen shall meet within 10 days after the second appraiser is appointed
and if, within 20 days after the second appraiser is appointed, the two
appraisers shall not agree upon a determination of the fair market value of
the Facility by 10% or less, then the Purchase Price shall be the amount
exactly in between the appraisers' determinations. If the two appraisers
shall not agree upon a determination of the fair market value of the
Facility by greater than 10%, they shall together appoint a third
appraiser. If said two appraisers cannot agree upon the appointment of a
third appraiser within 10 days after the expiration of such 20 day period,
then either party, on behalf of both, and on notice to the other may
request such appointment by the American Arbitration Association (or any
successor organization, or if no successor organization exists, a
comparable organization) in accordance with its then prevailing rules. If
the American Arbitration Association shall fail to appoint said third
appraiser within 10 days after such request is made, then either party may
apply, on notice to the
28
other, to the state court in Benton County, Arkansas (or any other court
having jurisdiction and exercising functions similar to those now exercised
by the foregoing court) for the appointment of such third appraiser. Each
party shall pay the fees and expenses of the appraiser selected by it. The
fees and expenses of the third appraiser and all other expenses (not
including the attorney's fees, witness fees and similar expenses of the
parties which shall be borne separately by each of the parties) of the
arbitration shall be borne equally by the parties hereto. Such appraisers
shall, by majority thereof, appraise the Facility in order to determine the
fair market value thereof in accordance with generally accepted appraisal
methods as promulgated and endorsed by the American Institute of
Appraisers. It is the intention of the foregoing provisions that a final
determination as to the purchase price should be reached within 90 days
following the giving of the First Notice.
(ii) If the Tenant exercises its option to purchase the Facility
within two years of the Term Commencement Date, Fifty Percent (50%) of all Fixed
Rent paid at the time of the exercise of such option shall be credited towards
such purchase price.
(c) If Tenant shall have elected to purchase the Facility by delivery of
the Second Notice to Landlord, the parties hereto shall enter into a contract of
sale in substantially the same form as the standard form of commercial contract
of sale accepted in the State of Arkansas. Such contract of sale shall be dated
the date that a final determination of the purchase price is made and shall
provide for a closing sixty days after such date (subject to such reasonable
extensions as the parties shall reasonably determine to be necessary).
29
(d) In the event that (i) Tenant elects to purchase the Facility by
delivery of the Second Notice to Landlord; and (ii) the title to the Facility
fails to be transferred due to or arising out of any act, failure to act or
negligence of Tenant, then this Lease Agreement and all of its terms shall
remain in full force and effect for the then remaining balance of the Lease
Term.
Section 9.2 Equipment Purchase Option. Provided that Tenant shall (i) not
-------------------------
be in default in the performance of any of the terms, covenants or conditions
herein contained on the date the option shall be exercised and on the date title
shall be transferred pursuant to this Article, and (ii) that Tenant herein
named, or any permitted assignee of Tenant shall be in occupancy of the entire
Facility the date the option shall be exercised and on the date title shall be
transferred pursuant to this Section, Tenant shall have the option to purchase
the Equipment during the Lease Term for Seventy-Five Thousand Dollars
($75,000.00) (the "Purchase Option"). If the Purchase Option is exercised within
twelve months of the Term Commencement Date. One Hundred Percent (100%) of all
Equipment Rent paid at the time of the exercise of such option shall be credited
towards such purchase price.
ARTICLE X
RIGHT OF FIRST REFUSAL
Section 10.1. Right of First Refusal. Notwithstanding anything
----------------------
contained in Section 9.1 of this Lease Agreement, Landlord can sell, transfer,
or otherwise dispose of the Facility if Landlord complies with the requirements
set forth in this Section 10.1. Landlord shall not, during the Lease Term, sell,
transfer, or otherwise dispose of the Facility unless Landlord first shall have
received a bona fide offer for the purchase of the Facility and shall have
notified Tenant in writing of the names of the party or parties making the
offer, the price and the terms and conditions thereof. Tenant shall have the
prior right, at its option, for a period of 30 days following receipt by Tenant
of Landlord's notice of the offer, by notice to the Landlord of its
30
intention to do so, to purchase the Facility, at the same price and upon the
same terms and conditions as are contained in such offer. In the event that
Tenant exercises its option to purchase, Tenant shall be obligated to pay the
purchase price or accept title to the premises in accordance with the provisions
of the offer and to close the transfer of title on the date provided for in such
offer, but in no event before the sixtieth day following the date of the giving
of such notice of exercise. If Tenant fails to exercise its right to purchase
the Facility, and for any reason Landlord shall not thereafter sell or convey
the Facility, to the party or parties making the offer at a price not less than
that contained in the offer and upon substantially the same terms and conditions
contained therein, the foregoing restriction against Landlord's sale or other
disposition of the Facility set forth in this Section shall continue in full
force and effect and Tenant's prior right to purchase shall apply with respect
to any new offer relating to the Facility received by Landlord, all as more
particularly provided above. If Tenant fails to exercise its right to purchase
the Facility, and Landlord thereafter sells or conveys the Facility to the party
or parties making the offer, this Lease Agreement will terminate and Tenant
shall have six months to vacate the Facility. The provisions of this Section
shall not apply to transfers of ownership interests in Landlord or to a transfer
to an entity within the corporate family or other entity to which substantially
all of Landlord's assets are transferred, or to any other change in the
beneficial ownership of Landlord. In the event that Tenant elects to purchase
the Facility pursuant to this Section and the title to the Facility fails to be
transferred due to or arising out of any act, failure to act or negligence of
Tenant, then in addition to any other rights or claims Landlord will have at
law, equity or otherwise, such failure will be considered an Event of Default
under this Lease Agreement.
31
ARTICLE XI
MISCELLANEOUS
Section 11.1. Surrender of Facility. At the termination of the Lease
---------------------
Term Tenant shall surrender possession of the Facility peacefully and promptly
to Landlord in good repair and good order.
Section 11.2. Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed given if hand delivered or if sent by
registered or certified mail, return receipt requested, when deposited in the
mails, by first class postage prepaid, addressed as follows:
To Landlord: Ex-Cell Home Fashions, Inc.
295 Fifth Avenue
New York, New York 10016
Attention: Samuel Samelson, President
with a copy to: Ex-Cell Home Fashions, Inc.
P.O. Box 1879
Goldsboro, NC 27533
Attention: Jerry Bankhead,
V.P. of Manufacturing & Distribution
with a copy to: Glenoit Corporation
111 West 40th Street
New York, NY 10018
Attention: Dupuy Sears, Chief Financial Officer
with a copy to: Winston & Strawn
200 Park Avenue
New York, New York 10166
Attention: John C. Phelan, Esq.
To Tenant: Aladdin Manufacturing Corporation
c/o Mohawk Rug & Textiles Division
P.O. Box 130
3090 Sugar Valley Road, NW
Sugar Valley, GA 30746
with a copy to: Mohawk Industries, Inc.
160 South Industrial Blvd.
P.O. Box 12069
32
Calhoun, GA 30703
Attention: Salvatore J. Perillo, General Counsel
Landlord and Tenant may, by notice given hereunder, designate any further or
different addresses to which subsequent notices and other communications shall
be sent.
Section 11.3. Binding Effect. This Lease Agreement shall inure to the
--------------
benefit of and shall be binding upon Landlord, Tenant and their respective
successors and permitted assigns.
Section 11.4. Severability. In the event any provision of this Lease
------------
Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof.
Section 11.5. Amendments, Changes and Modifications. This Lease Agreement
-------------------------------------
may not be amended, changed, modified or altered except by a writing executed by
the parties.
Section 11.6. Execution of Counterparts. This Lease Agreement may be
-------------------------
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.
Section 11.7. Applicable Law. This Lease Agreement shall be governed by
--------------
the laws of the State of Arkansas.
Section 11.8. Table of Contents and Section Headings Not Controlling.
------------------------------------------------------
The Table of Contents and the headings of the several sections in this Lease
Agreement have been prepared for convenience of reference only and shall not
control, affect the meaning or be taken as an interpretation of any provision of
this Lease Agreement.
Section 11.9. Estoppel Certificate. Tenant agrees at any time and from
--------------------
time to time to execute and deliver to the Landlord a statement (i) certifying
that this Lease Agreement is unmodified and in full force and effect (or, if
there have been modifications, that the same is in full force and effect as
modified and reciting such modifications) and whether any options
33
granted to Tenant pursuant to the provisions of this Lease Agreement have been
exercised, (ii) certifying the dates to which the Fixed Rent and Additional Rent
have been paid and the amounts thereof, and (iii) stating whether or not, to the
best knowledge of Tenant, the Landlord is in default in performance of any of
its obligations under the Lease Agreement, and, if so, specifying each such
default of which Tenant may have knowledge, it being intended that any such
statement delivered pursuant hereto may be relied upon by others with whom the
Landlord may be dealing.
Section 11.10. Quiet Enjoyment. The Landlord covenants and agrees with
---------------
Tenant that upon Tenant paying the Fixed and, Additional Rent and observing and
performing all the terms, covenants and conditions, on Tenant's part to be
observed and performed, Tenant may peaceably and quietly enjoy the Facility.
Section 11.11. Security Deposit. Tenant has deposited with Landlord a sum
----------------
equal to one monthly installment of Fixed Rent, as security for the full and
punctual performance by Tenant of all of the terms of this Lease Agreement.
Landlord agrees to pay to Tenant, promptly following each anniversary of the
Term Commencement Date, interest on such security deposit at the rate of four
percent per annum. In the event Tenant defaults in the performance of any of the
terms of this Lease Agreement, Landlord may apply the whole or any part of the
security so deposited to the extent required for the payment of (i) any rent or
(ii) any sum which Landlord may expend or may be required to expend by reason of
Tenant's default including, without limitation, any damages or deficiency in the
reletting of the Facility, whether accruing before or after summary proceedings
or other re-entry by Landlord. Upon each such application, Tenant shall, on
demand, pay to Landlord the sum so applied which shall be added to the security
deposit so that the same shall be restored to the amount first set forth above.
if Tenant shall fully
34
and punctually comply with all of the terms of this Lease Agreement, the amount
of the security deposit, without interest, shall be returned to Tenant after the
termination of this Lease Agreement and delivery of exclusive possession of the
Facility, Landlord shall have the right to transfer the security to the vendee
or lessee and Landlord shall ipso facto be released by Tenant from all liability
for the return of such security; and Tenant agrees to look solely to the new
landlord for the return of said security and it is agreed that the provisions
hereof shall apply to every transfer or assignment made of the security to a new
landlord. Tenant shall not assign or encumber or attempt to assign or encumber
the monies deposited herein as security and neither Landlord nor its successors
or assigns shall be bound by any such assignment, encumbrance, or attempted
assignment or encumbrance.
Section 11.12. No Additional Waiver Implied By One Waiver. In the event
------------------------------------------
any agreement contained herein should be breached by Tenant and thereafter
waived by Landlord, such waiver shall be limited to the particular breach so
waived and shall not be deemed to waive any other breach hereunder.
Section 11.13. Brokerage Agreement. Tenant represents and warrants to
-------------------
Landlord that no broker brought about this lease transaction, and that neither
Tenant nor its respective employees or agents had any conversations or other'
contract with any in regard to this lease transaction. Tenant acknowledges that
Landlord is entering into this lease in reliance upon the foregoing warranty and
representation. Tenant agrees to cooperate with Landlord and to provide
testimony in any action, or proceeding brought against Landlord based upon a
claim by a broker for a commission or other such payment in connection with this
lease transaction.
Section 11.14 Excluded Equipment. The pillow closing sewing machines
------------------
will be included in this Lease Agreement as Equipment for a period of one month
following the Term
35
Commencement Date, at which time such pillow closing sewing machines shall no
longer be included as Equipment hereunder and shall, at Landlord's sole cost and
expense, be disassembled, properly packaged and shipped to Landlord at Ex-Cell
Home Fashions, Inc., P.O. Box 1879, Goldsboro, NC 27533, Attention: Jerry
Bankhead, V.P. of Manufacturing & Distribution.
Section 11.15 Storage Area. Landlord may, at its option, vacate the
------------
Storage Area currently excludes from the Initial Space (as hereinafter defined)
leased under the Lease Agreement, and lease such Storage Area to Tenant at an
annual rental rate per rentable square foot equal to the then payable fixed
annual base under this Lease Agreement and otherwise on the same terms and as
are set forth in this Lease Agreement.
(a) Landlord shall give Tenant a notice (the "Storage Area Notice")
not less than thirty days prior to the date Tenant would be required to accept
possession of same hereunder. The Storage Area Notice shall (i) indicate the
date on which the Storage Area shall become available and (ii) specify
Landlord's determination of the rent for the Storage Area. Tenant shall lease
the Storage Area at the fixed annual rent specified in the Storage Area Notice,
subject to adjustment as hereinafter provided, for a term commencing on the
"Storage Area Term Commencement Date" (as hereinafter defined) and continuing
for the balance of the Term on the terms and conditions hereinafter specified.
(b) This Lease Agreement shall automatically be amended to include
the Storage Area effective as of the Storage Area Term Commencement Date upon
the terms and conditions herein specified:
(i) Landlord hereby leases to Tenant and Tenant hereby rents
from Landlord the Storage Area on the terms and conditions hereinafter set forth
for a term (the
36
"Storage Area Term") commencing on the date set forth in such Storage Area
Notice as the date the Storage Area was to become available, (the "Storage Area
Term Commencement Date") and ending on the expiration date of the term for the
space initially leased by Tenant hereunder (the "Initial Space")
(ii) The fixed annual base rent payable under this lease as the
same may have been increased from time to time pursuant to the terms of this
lease shall be further increased by an amount equal to rentable space feet of
the Storage Area multiplied by the fixed annual rent per rentable square foot
for such Storage Area specified in the Storage Area Notice.
(iii) Tenant will accept said Storage Area in its "as is"
condition on the Storage Area Term Commencement Date.
(c) Except as otherwise specifically provided in this Article, from
and after the Storage Area Term Commencement Date, all references in the lease
to the demised premises shall be deemed to apply to the Storage Area as well as
to the Initial Space and all of the terms, provisions and conditions of this
lease shall apply to the Storage Area with the same force and effect as if it
were leased to Tenant initially together with the Initial Space.
(d) Should the Storage Area Term Commencement Date for the Storage
Area fall on any day other than the first day of a month, then the fixed annual
rent attributable to the Storage Area shall be prorated on a per diem basis, and
Tenant agrees to pay the amount thereof for such partial month on the Storage
Area Term Commencement Date.
(e) In no event shall the fixed annual rent payable with respect to
the Storage Area on a per square foot basis determined as herein provided be
less than the fixed annual rent per square foot than being paid under this lease
for the Initial Space.
37
(f) From and after the first day of the Storage Area Term, all
references in the lease to the demised premises shall be deemed to apply to the
Storage Area and Initial Space.
(g) Except as expressly permitted by this lease, Tenant shall not be
permitted to sublet or assign all or any part of the Storage Area.
(h) Except as otherwise specifically provided in this Article, all of
the terms, provisions and conditions of the lease shall apply to the Storage
Area with the same force and effect as if it were leased to Tenant initially
together with the Initial Space demised hereunder.
(i) The termination, cancellation or surrender of this lease as to
the entire demised premises shall terminate any rights of Tenant pursuant to
this Article.
Section 11.16 Personal Property. The Equipment is, and shall at all
-----------------
times be and remain, personal property notwithstanding that the Equipment or any
part thereof may now be, or hereafter become, in any matter affixed or attached
to, or imbedded in, or permanently resting upon, real property or any building
thereon, or attached in any manner to what is permanent as by means of cement,
plaster nails, bolts, screws or otherwise.
Section 11.17 Ownership. The Equipment is, and shall at all times be
---------
an remain, the sole and exclusive property of Landlord; and Tenant shall have no
right, title or interest therein or thereto except as expressly set forth in
this Lease Agreement.
38
IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease
Agreement to be executed in their respective corporate names and their
respective corporate seals to be hereunto affixed and attested by their duly
authorized officers, all as of the date first above written.
EX-CELL HOME FASHIONS, INC.
By: /s/ Samuel Samelson
-------------------------
Name: Samuel Samelson
Title: President
ALADDIN MANUFACTURING CORPORATION
By: /s/ Salvatore J. Perillo
--------------------------
Name: Salvatore J. Perillo
Title: Asst Secretary
General Council
39
EXHIBIT A
Description of Land
SURVEY FOR BEAR BRAND
---------------------