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Exhibit 10.32
▇▇▇▇▇▇▇ COMPANIES, INC.
INDUSTRIAL GROSS LEASE
ARTICLE ONE: BASIC TERMS
This Article One contains the Basic Terms of this Lease between the Lessor and
Lessee named below. Other Articles, Sections and Paragraphs of the Lease
referred to in this Article One explain and define the Basic Terms and are to be
read in conjunction with the Basic Terms.
Section 1.01. Date of Lease: May 28, 1998
Section 1.02. Lessor: ▇▇▇▇▇▇▇ Companies, Inc., an Oklahoma
Corporation
Address of Lessor: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇.▇. Box
26647, Oklahoma City, Oklahoma,
73126
Section 1.03. Lessee: Gildan Activeware, Inc. a Canadian
Corporation
Address of Lessee: ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-
▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
Section 1.04. Property:
The Property is part of Lessor's property known as the ▇▇▇▇▇▇▇ Miami Facility
located at ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ and described or depicted in
Exhibit "A" (the "Project"). The Project includes the land, approximately
763,451 square feet of buildings and all other improvements located on the land,
and the common areas described in Paragraph 4.05(a). The Property is defined as
a portion of the ▇▇▇▇▇▇▇ Miami Facility consisting of approximately 210,654
square feet of warehouse space within the Project including currently installed
racking systems (Property graphically identified in Exhibit 'A').
Section 1.05. Lease Term:
This Lease is for a period of nineteen (19) Months beginning on July 1, 1998, or
such other date as is specified in this Lease, and ending on January 31, 2000,
the "Lease Term".
Section 1.06. Permitted Uses: (See Article Five) Storage and distribution of
garments.
Section 1.07. ▇▇▇▇▇▇'s Guarantor: NONE
Section 1.08. Brokers: (See Article Fourteen)
Lessor's Broker: ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ of ARIZONA, INC., ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇ and
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ of FLORIDA, INC., ▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇▇
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INDUSTRIAL GROSS LEASE
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By and Between:
▇▇▇▇▇▇▇ COMPANIES, INC.
an Oklahoma Corporation
as "Lessor'
and
▇▇▇▇▇▇ ACTIVEWEAR, INC.
a Canadian Corporation
as "Lessee"
Dated: May 28, 1998
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Lessee's Broker: ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ of FLORIDA, INC., ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Section 1.09. Commission Payable to Brokers: $85,051.55
Section 1.10. Initial Security Deposit: (See Section 3.03) None
Section 1.11. Vehicle Parking Spaces Allocated to Lessee: (See Section 4.05)
Unrestricted parking around the Property within the boundaries
identified in Exhibit "A" and subject to the provisions of Section
4.05.
Section 1.12. Rent and Other Charges Payable by ▇▇▇▇▇▇:
(a) BASE RENT: Starting on the Rental Commencement Date, which is herein defined
as August 1, 1998, Lessee shall pay Lessor, as provided in Section 3.01, base
rent in the monthly amount of Seventy Four Thousand Six Hundred Six and 63/100
Dollars ($74,606.63), ("Base Rent").
(b) OTHER PERIODIC PAYMENTS: In addition to the foregoing Base Rent due in
consideration for this Lease, Lessee shall pay:
(i) Utilities, other than electricity water and sewer
service, paid directly to the appropriate supplier (See
Section 4.03);
(ii) Liability Insurance (See Section 4.04); and
(iii) Maintenance, alterations & repairs pursuant to the terms
of Article Six.
Section 1.13. ▇▇▇▇▇▇'s Share of Profit on Assignment or Lease: (See Section
9.05) Lessor's share of Profit on Assignment or Lease is one hundred percent
(100%) of the Profit (the "Lessor's Share").
Section 1.14. Riders:
The following Riders are attached to and made a part of this Lease:
Exhibit "A" - Site Plan
ARTICLE TWO: LEASE TERM
Section 2.01. Lease of Property For Lease Term.
Lessor leases the Property to Lessee and Lessee leases the Property from Lessor
for the Lease Term. The Lease Term is for the period stated in Section 1.05
above and shall begin and end on the dates specified in Section 1.05 above,
unless the beginning or end of the Lease Term is changed under any provision of
this Lease. The "Commencement Date" shall be the date specified in Section 1.05
above for the beginning of the Lease Term, unless advanced or delayed under any
provision of this Lease.
Section 2.02. Delay in Commencement
Lessor shall not be liable to Lessee if Lessor does not deliver possession of
the Property to Lessee on the Commencement Date. ▇▇▇▇▇▇'s non-delivery of the
Property to Lessee on that
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date shall not affect this Lease or the obligations of Lessee under this Lease,
except that the Commencement Date shall be delayed until Lessor delivers
possession of the Property to Lessee, and the Lease Term shall be extended for a
period equal to the delay In delivery of possession of the Property to Lessee,
plus the number of days necessary to end the Lease Term on the last day of a
month. If Lessor does not deliver possession of the Property to Lessee within
fifteen (15) days after the Commencement Date, Lessee may elect to cancel this
Lease by giving written notice to Lessor within ten (10) days after the fifteen
(15) day period ends. If Lessee gives such notice, the Lease shall be canceled
and neither Lessor nor Lessee shall have any further obligations to the other.
If Lessee does not give such notice, ▇▇▇▇▇▇'s right to cancel the Lease shall
expire and the Lease Term shall commence upon the delivery of possession of the
Property to Lessee. If delivery of possession of the Property to Lessee is
delayed, Lessor and Lessee shall, upon such delivery, execute an amendment to
this Lease, setting forth the actual Commencement Date and expiration date of
the Lease. Failure to execute such amendment shall not affect the actual
Commencement Date and expiration date of the Lease.
Section 2.03. Early Occupancy.
If ▇▇▇▇▇▇ occupies the Property prior to the Commencement Date, ▇▇▇▇▇▇'s
occupancy of the Property shall be subject to all of the provisions of this
Lease. Early occupancy of the Property shall not advance the expiration date of
this Lease. Lessee shall not pay Base Rent or any other charges specified in
this Lease for the early occupancy.
Section 2.04. Holding Over.
Lessee shall vacate the Property upon the expiration or earlier termination of
this Lease. Lessee shall reimburse Lessor for and indemnify Lessor against
actual damages which Lessor incurs from ▇▇▇▇▇▇'s delay in vacating the Property.
If Lessee does not vacate the Property upon the expiration or earlier
termination of the Lease, and Lessor hereafter accepts rent from Lessee,
▇▇▇▇▇▇'s occupancy of the Property shall be a "month-to-month" tenancy, subject
to all of the terms of this Lease applicable to a month-to-month tenancy, except
that the Base Rent then in effect shall be increased by 25%.
ARTICLE THREE: BASE RENT
Section 3.01. Time and Manner of Payment.
Upon execution of this Lease, Lessee shall pay Lessor the Base Rent in the
amount stated in Paragraph 1.12(a) above for August, 1998. On the first day of
September, 1998 and each month thereafter, Lessee shall pay Lessor the Base
Rent, in advance, without offset, deduction or prior demand. The Base Rent shall
be payable at Lessor's Local Address identified in Section 1.02, above, or at
such other place as Lessor may designate in writing.
Section 3.02. Termination - Advance Payments.
Upon termination of this Lease under Article Seven (Damage & Destruction),
Article Eight (Condemnation) or any other termination not resulting from
▇▇▇▇▇▇'s default, and after ▇▇▇▇▇▇ has vacated the Property in the manner
required by this Lease, Lessor shall refund or credit to Lessee (or ▇▇▇▇▇▇'s
successor) the unused portion of the Security Deposit, any advance rent or other
advance payments made by Lessee to Lessor, and any amounts paid for real
property taxes and other reserves which apply to any time periods after
termination of the Lease.
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ARTICLE FOUR: OTHER CHARGES PAYABLE BY ▇▇▇▇▇▇
Section 4.01. Additional Rent.
All charges payable by Lessee other than Base Rent are called "Additional Rent."
Unless this Lease provides otherwise, Lessee shall pay all Additional Rent then
due with the next monthly installment of Base Rent. The term "rent" shall mean
Base Rent and Additional Rent.
Section 4.02. Expenses
The purpose of this Section 4.02 is to ensure that Lessee bears the cost of all
general maintenance to the Property and to the outside area surrounding the
Property segregated from the Project for the purpose of Lessee's access, loading
and parking. Lessee shall perform the maintenance required of it by Article Six
and pay directly to its chosen supplier the cost of such general maintenance and
shall operate the Property in a first class manner. In addition, Lessee shall
pay all costs and expenses of maintaining liability insurance defined in Section
4.04.(a), below, directly to the appropriate insurance providor and the cost of
any personal property taxes as defined below:
Personal Property Taxes.
(i) Lessee shall pay all taxes charged against trade fixtures,
furnishings, equipment or any other personal property belonging to
▇▇▇▇▇▇. Lessee shall try to have personal property taxed separately
from the Property.
(ii) If any of ▇▇▇▇▇▇'s personal property is taxed with the Property,
Lessee shall pay Lessor the taxes for the personal property within
fifteen (15) days after ▇▇▇▇▇▇ receives a written statement from
Lessor for such personal property taxes.
Section 4.03. Utilities.
Water, sewer and electrical utility service to the dry warehouse area and the
office area of the Project ("Reimbursable Utilities") are separately metered and
paid by Lessor. As the Property is a portion of the dry warehouse area, ▇▇▇▇▇▇
shall be responsible for reimbursing Lessor twenty six percent (26%) of
Reimbursable Utilities within fifteen (15) days after receipt of ▇▇▇▇▇▇'s
written statement. In no event shall such reimbursements for ▇▇▇▇▇▇'s share of
Reimbursable Utilities exceed seventy three thousand five hundred dollars
($73,500) per year during the Lease Term. Lessee shall pay, directly to the
appropriate supplier, the cost of all telephone, refuse disposal and other
utilities and services supplied to the Property for Lessee's use.
Section 4.04. Insurance Policies.
(a) Liability Insurance. During the Lease Term, Lessee shall maintain, at
Lessee sole expense, a policy of commercial general liability insurance
(sometimes known as broad form comprehensive general liability insurance)
insuring Lessee against liability for bodily injury, property damage
(including loss of use of property) and personal injury arising out of the
operation, use or occupancy of the Property. Lessee shall name Lessor as
an additional insured under such policy. The initial amount of such
insurance shall be Two Million Dollars ($2,000,000) per occurrence. The
liability insurance obtained by Lessee under this Paragraph 4.04(a) shall
contain cross-liability endorsements; and insure
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Lessor against ▇▇▇▇▇▇'s performance under Section 5.05, if the matters
giving rise to the indemnity under Section 5.05 result from the negligence
of Lessee. The amount and coverage of such insurance shall not limit
Lessee's liability nor relieve Lessee of any other obligation under this
Lease. Lessor may also obtain comprehensive public liability insurance in
an amount and with coverage determined by Lessor insuring Lessor against
liability arising out of ownership, operation, use or occupancy of the
Property. The policy obtained by Lessor shall not be contributory and
shall not provide primary insurance.
(b) Property Insurance. During the Lease Term, Lessor shall maintain policies
of insurance covering loss of or damage to the Property in the full amount
of its replacement value. Such policy shall contain an Inflation Guard
Endorsement and shall provide protection against all perils included
within the classification of fire, extended coverage, vandalism, malicious
mischief, special extended perils (all risk), sprinkler leakage and any
other perils which Lessor deems reasonably necessary. Lessor shall have
the right to obtain flood and earthquake insurance if required by any
lender holding a security interest in the Property. Lessor shall not
obtain insurance for Lessee's fixtures or equipment or building
improvements installed by Lessee on the Property. Lessee shall not do or
permit anything to be done which invalidates any insurance policies.
(c) General Insurance Provisions.
(i) Any insurance which Lessee is required to maintain under this Lease
shall include a provision which requires the insurance carrier to
give Lessor not less than thirty (30) days' written notice prior to
any cancellation or modification of such coverage.
(ii) If Lessee fails to deliver any insurance certificate to Lessor
required under this Lease within the prescribed time period or if
any such certificate or its underlying insurance policy is canceled
or modified during the Lease Term without Lessor's consent Lessor
may obtain such insurance, in which case Lessee shall reimburse
Lessor for the cost of such insurance within fifteen (15) days after
receipt of a statement that indicates the cost of such insurance.
(iii) Lessee shall maintain all insurance required under this Lease with
companies holding a "General Policy Rating" of A-12 or better, as
set forth in the most current issue of "Best Key Rating Guide".
▇▇▇▇▇▇ acknowledges that the insurance described in this Section
4.04 is for the primary benefit of Lessor. Lessor makes no
representation as to the adequacy of such insurance to protect
Lessor's or ▇▇▇▇▇▇'s interests. Therefore, Lessee shall obtain any
such additional property or liability insurance which Lessee deems
necessary to protect Lessor and Lessee.
(iv) Unless prohibited under any applicable insurance policies
maintained, Lessor and Lessee each hereby waive any and all rights
of recovery against the other, or against the officers, employees,
agents or representatives of the other, for loss of or damage to its
property or property of others under its control, if such loss or
damage is covered by any insurance policy in force (whether or not
described in this Lease) at the time of such loss or damage. Upon
obtaining the required policies of insurance, Lessor and Lessee
shall give notice to the insurance carriers of this mutual waiver of
subrogation.
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Section 4.05. Lessee's Access, Security, and Use of the Parking Areas
Lessee shall have use of the land surrounding the Property roughly identified on
the site plan incorporated as Exhibit A for purposes of vehicular parking and
delivery maneuvering room.
Section 4.06. Late Charges.
▇▇▇▇▇▇'s failure to pay rent promptly may cause Lessor to incur unanticipated
costs. The exact amount of such costs are impractical or extremely difficult to
ascertain. Such costs may include, but are not limited to, processing and
accounting charges and late charges which may be imposed on Lessor by any ground
lease, mortgage or trust deed encumbering the Property. Therefore, if Lessor
does not receive any rent payment within ten (10) days after it becomes due,
Lessee shall pay Lessor a late charge equal to ten percent (10%) of the overdue
amount. The parties agree that such late charge represents a fair and reasonable
estimate of the costs Lessor will incur by reason of such late payment.
Section 4.07. Interest on Past Due Obligations.
Any amount owed by Lessee to Lessor which is not paid when due shall bear
interest at the rate of fifteen percent (15%) per annum from the due date of
such amount. However, interest shall not be payable on late charges to be paid
by Lessee under this Lease. The payment of interest on such amounts shall not
excuse or cure any default by Lessee under this Lease. If the interest rate
specified in this Lease is higher than the rate permitted by law the interest
rate is hereby decreased to the maximum legal interest rate permitted by law.
ARTICLE FIVE: USE OF PROPERTY
Section 5.01. Permitted Uses.
Lessee may use the Property only for the Permitted Uses set forth in Section
1.06 above.
Section 5.02 Manner of Use.
Lessee shall not cause or permit the Property to be used in any way which
constitutes a violation of any law, ordinance, or governmental regulation or
order, which annoys or interferes with the rights of Lessor or other users of
the Project, or which constitutes a nuisance or waste. Lessee shall obtain and
pay for all permits, including a Certificate of Occupancy, required for Lessee's
occupancy of the Property and shall promptly take all actions necessary to
comply with all applicable statutes, ordinances, rules, regulations, orders and
requirements regulating the use by Lessee of the Property including the
Occupational Safety and Health Act as well as all applicable statutes,
ordinances, rules, regulations, orders and requirements requiring alterations or
improvements to the Property (such as the Americans with Disabilities Act), the
requirement for compliance with which arises by reason of (a) the Lessee's use
of the Property (other than requirements applicable to warehousing usage of the
Property); or (b) improvements, alterations or additions to the Property made by
Lessee.
Section 5.03. Hazardous Materials.
As used in this Lease, the term "Hazardous Material" means any flammable items,
explosives, radioactive materials, hazardous or toxic substances, material or
waste or related materials, including any substances defined as or included in
the definition of "hazardous substances", "hazardous wastes", "hazardous
materials" or "toxic substances" now or subsequently regulated under any
applicable federal, state or local laws or regulations, including without
limitation
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petroleum-based products, paints, solvents, lead, cyanide, DDT, printing inks,
acids, pesticides, ammonia compounds and other chemical products, asbestos, PCBs
and similar compounds, and including any different products and materials which
are subsequently found to have adverse effects on the environment or the health
and safety of persons. Lessee shall not cause or permit any Hazardous Materials
to be generated, produced, brought upon, used, stored, treated or disposed of in
or about the Project by Lessee, its agents, employees, contractors, subtenants
or invitees without the prior written consent of Lessor. Lessor shall be
entitled to take into account such other factors or facts as Lessor may
reasonably determine to be relevant in determining whether to grant or withhold
consent to ▇▇▇▇▇▇'s proposed activity with respect to Hazardous Materials. In no
event, however, shall Lessor be required to consent to the installation or use
of any storage tanks on the Property.
Section 5.04. Signs and Auctions.
Lessee shall not place any signs on the Property without ▇▇▇▇▇▇'s prior written
consent, which consent will not be unreasonably withheld. Lessee shall not
conduct or permit any auctions or sheriffs sales at the Property.
Section 5.05. Indemnity.
Lessee shall indemnify, defend and hold Lessor harmless from and against any and
all claims, damages, liabilities, actions, causes of action, costs and expenses
arising from, in connection with or in any way related to: (i) Lessee's use of
the Property; (ii) the conduct of ▇▇▇▇▇▇'s business or anything else done in or
about the Property, including any contamination of the Property or any other
property resulting from the presence or use of Hazardous Material caused or
permitted by Lessee; (iii) any breach or default in the performance of ▇▇▇▇▇▇'s
obligations under this Lease; (iv) any misrepresentation or breach of warranty
by Lessee under this Lease; or (v) other acts or omissions of Lessee. Lessee
shall defend Lessor against any such cost, claim or liability at ▇▇▇▇▇▇'s
expense with counsel reasonably acceptable to Lessor or, at Lessor's election,
▇▇▇▇▇▇ shall reimburse Lessor for any legal fees or costs incurred by Lessor in
connection with any such claim. As a material part of the consideration to
Lessor, ▇▇▇▇▇▇ assumes all risk of damage to property or injury to persons in or
about the Property arising from any cause other than Lessor's negligence or
willful misconduct, and Lessee hereby waives all claims in respect thereof
against Lessor, except for any claim arising out of Lessor's negligence or
willful misconduct. As used in this Section, the term "Lessee" shall include
Lessee's employees, agents, contractors and in invitees, if applicable.
Section 5.06. Lessor's Access.
Lessor or its agents may, upon providing Lessee with prior notice, enter the
Property at all reasonable times show the Property to potential buyers,
investors or lessees or other parties; to do any other act or to inspect and
conduct tests in order to monitor ▇▇▇▇▇▇'s compliance with all applicable
environmental laws and all laws governing the presence and use of Hazardous
Material; or for any other purpose Lessor deems necessary. Lessor shall give
Lessee prior notice of such entry, except in the case of an emergency. Lessor
may place customary "For Sale" or "For Lease" signs on the Property.
Section 5.07. Quiet Possession.
If ▇▇▇▇▇▇ pays the rent and complies with all other terms of this Lease, Lessee
may occupy and enjoy the Property for the full Lease Term, subject to the
provisions of this Lease.
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ARTICLE SIX: CONDITION OF PROPERTY; MAINTENANCE, REPAIRS AND ALTERATIONS
Section 6.01. Existing Conditions.
In order to accommodate ▇▇▇▇▇▇'s use of the Property, ▇▇▇▇▇▇ agrees to make the
following repairs and alterations prior to the Lease Commencement Date, at
▇▇▇▇▇▇'s sole expense:
2) Install two double-occupant restrooms in the warehouse area;
3) Block all wall openings between the Property and the Project with drywall
and framing studs; and
4) Install new fencing along the northern boundary of the property line in
order to separate Lessee's and Lessor's truck traffic.
In addition to the foregoing specific repairs, the Property will be delivered to
Lessee upon Lease Commencement broom-cleaned with all mechanical and lighting
systems in good working order. With the exception of the foregoing improvements
Lessor is required to make, ▇▇▇▇▇▇ accepts the Property in its condition as of
the execution of the Lease, subject to all recorded matters, laws, ordinances,
and governmental regulations and orders. Except as provided herein, ▇▇▇▇▇▇
acknowledges that neither Lessor nor any agent of ▇▇▇▇▇▇ has made any
representation as to the condition of the Property or the suitability of the
Property for ▇▇▇▇▇▇'s intended use. Lessee represents and warrants that Lessee
has made its own inspection of and inquiry regarding the condition of the
Property and is not relying on any representations of Lessor or any Broker with
respect thereto.
Lessor does not represent or warrant to Lessee that the Property is in
compliance with the Americans with Disabilities Act of 1990, as amended ("ADA")
although Lessor will undertake any alterations or improvements hereafter
required by appropriate authority to bring the Property into compliance except
to the extent Lessee is required to undertake the same under Section 5.02.
Section 6.02. Exemption of Lessor from Liability.
Lessor shall not be liable for any damage or injury to the person, business (or
any loss of income therefrom), goods, wares, merchandise or other property of
Lessee, Lessee's employees, invitees, customers or any other person in or about
the Property, whether such damage or injury is caused by or results from: (a)
fire, steam, electricity, water, gas or rain; (b) the breakage, leakage,
obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing,
air conditioning or lighting fixtures or any other cause; (c) conditions arising
in or about the Property or upon other portions of the Property, or from other
sources or places; or (d) any act or omission of any other lessee of the
Property. Lessor shall not be liable for any such damage or injury even though
the cause of or the means of repairing such damage or injury are not accessible
to Lessee. The provisions of this Section 6.02 shall not, however, exempt Lessor
from liability for Lessor's negligence or willful misconduct.
Section 6.03. Lessor's Obligations.
(a) Except as provided in Article Seven (Damage or Destruction) and Article
Eight (Condemnation), Lessor shall keep the following in good order,
condition and repair the foundations, exterior walls and roof of the
Property. However, Lessor shall not be
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obligated to maintain or repair windows, doors, plate glass or the
interior surfaces of exterior walls. Lessor shall make repairs under this
Section 6.03 wIthin a reasonable time after receipt of written notice from
▇▇▇▇▇▇ of the need for such repairs.
(b) Lessee waives the benefit of any statute in effect now or in the future
which might give Lessee the right to make repairs at Lessor's expense or
terminate this Lease due to Lessor's failure to keep the Property in good
order, condition and repair.
Section 6.04. ▇▇▇▇▇▇'s Obligations.
(a) Except as provided in Section 6.03, Article Seven (Damage or Destruction)
and Article Eight (Condemnation), Lessee shall keep all portions of the
Property (including nonstructural, interior, systems and equipment) in
good order, condition and repair, excepting latent defects. If any portion
of the Property any system or equipment in the Property which Lessee is
obligated to repair cannot be fully repaired or restored, Lessee shall
promptly replace such portion of the Property or system or equipment in
the Property, regardless of whether the benefit of such replacement
extends beyond the Lease Term; but if the benefit or useful life of such
replacement extends beyond the Lease Term (as such term may be extended by
exercise of any options), the useful life of such replacement shall be
prorated over the remaining portion of the Lease Term (as extended), and
Lessee shall be liable only for that portion of the cost which is
applicable to the Lease Term (as extended). Lessee shall maintain a
preventative maintenance contract providing for the regular inspection and
maintenance of the heating and air conditioning system by a licensed
heating and air conditioning contractor. If any part of the Property is
damaged by any act or omission of Lessee, Lessee shall pay Lessor the cost
of repairing or replacing such damaged property, whether or not Lessor
would otherwise be obligated to pay the cost of maintaining or repairing
such property.
(b) Lessee shall fulfill all of Lessee's obligations under this Section 6.04
at ▇▇▇▇▇▇'s sole expense. If Lessee fails to maintain, repair or replace
the Property as required by this Section 6.04, Lessor may, upon ten (10)
days' prior notice to Lessee (except that no notice shall be required in
the case of an emergency), enter the Property and perform such maintenance
or repair (including replacement, as needed) on behalf of Lessee. In such
case, ▇▇▇▇▇▇ shall reimburse Lessor for all costs incurred in performing
such maintenance or repair immediately upon demand.
Section 6.05. Alterations, Additions, Improvements
Lessee shall not make any alterations, additions, or improvements to the
Property without Lessor's prior written consent, except for non-structural
alterations which do not exceed Ten Thousand Dollars ($10,000) in cost
cumulatively over the Lease Term and which are not visible from the outside of
any building of which the Property is part. Lessor may require Lessee to provide
demolition and/or lien and completion bonds in form and amount satisfactory to
Lessor. Lessee shall promptly remove any alterations, additions, or improvements
constructed in violation of this Paragraph 6.05(a) upon ▇▇▇▇▇▇'s written
request. All alterations, additions, and improvements shall be done in a good
and workmanlike manner, in conformity with all applicable laws and regulations,
and by a contractor approved by Lessor, which approval will not be unreasonably
withheld. Upon completion of any such work, Lessee shall provide Lessor with "as
built" plans, copies of all construction contracts, and proof of payment for all
labor and materials.
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For any improvements made to the Property, Lessee shall pay when due all claims
for labor and material furnished to the Property. Lessee shall give Lessor at
least twenty (20) days' prior written notice of the commencement of any work on
the Property, regardless of whether ▇▇▇▇▇▇'s consent to such work is required.
Lessor may elect to record and post notices of non-responsibility on the
Property.
Section 6.06. Condition upon Termination.
Upon the termination of the Lease, ▇▇▇▇▇▇ shall surrender the Property to
Lessor, broom clean and in the same condition as received except for ordinary
wear and tear which Lessee was not otherwise obligated to remedy under any
provision of this Lease. Specifically, Lessee shall be obligated to restore the
racking system to its original configuration delivered at the time of Lease
Commencement. In addition, to the extent Lessor requires Lessee to remove any
alterations, additions or improvements (whether or not made with Lessor's
consent) prior to the expiration of the Lease and to restore the Property to its
prior condition, Lessee shall do so at ▇▇▇▇▇▇'s expense. All alterations,
additions and improvements which Lessor has not required Lessee to remove shall
become Lessor's property and shall be surrendered to Lessor upon the expiration
or earlier termination of the Lease, except that Lessee may remove any of
Lessee's machinery or equipment which can be removed without material damage to
the Property. Lessee shall repair, at Lessee's expense, any damage to the
Property caused by the removal of any such machinery or equipment. In no event
however, shall Lessee remove any of the following materials or equipment (which
shall be deemed Lessor's property) without Lessor's prior written consent: any
power wiring or power panels; lighting or lighting fixtures; wall coverings;
drapes, blinds or other window coverings; carpets or other floor coverings;
heaters, air conditioners or any other heating or air conditioning equipment;
fencing or security gates; or other similar building operating equipment and
decorations.
ARTICLE SEVEN: DAMAGE OR DESTRUCTION
Section 7.01. Partial Damage to Property.
(a) Lessee shall notify Lessor in writing immediately upon the occurrence of
any damage to the Property. If the Property is only partially damaged
(i.e., less than fifty percent (50%) of the Property is untenantable as a
result of such damage or less than fifty percent (50%) of Lessee's
operations are materially impaired) and if the proceeds received by Lessor
from the insurance policies described in Paragraph 4.04(b) are sufficient
to pay for the necessary repairs, this Lease shall remain in effect and
Lessor shall repair the damage as soon as reasonably possible. Lessor may
elect (but is not required) to repair any damage to Lessee's fixtures,
equipment, or improvements
(b) If the insurance proceeds received by Lessor are not sufficient to pay the
entire cost of repair, or if the cause of the damage is not covered by the
insurance policies which Lessor maintains under Paragraph 4.04(b), Lessor
may elect either to (i) repair the damage as soon as reasonably possible,
in which case this Lease shall remain in full force and effect, or (ii)
terminate this Lease as of the date the damage occurred. Lessor shall
notify Lessee within thirty (30) days after receipt of notice of the
occurrence of the damage whether Lessor elects to repair the damage or
terminate the Lease. If Lessor elects to repair the damage and the damage
was due to an act or omission of Lessee, or Lessee's employees, agents,
contractors or invitees, Lessee shall pay Lessor the
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"deductible amount" (if any) under Lessor's insurance policies.
Furthermore, if the damage was due to an act or omission of Lessee, or
▇▇▇▇▇▇'s employees, agents, contractors or invitees, the difference
between the actual cost of repair and any insurance proceeds received by
Lessor. If Lessor elects to terminate the Lease, Lessee may elect to
continue this Lease in full force and effect, in which case Lessee shall
repair any damage to the Property. Lessee shall pay the cost of such
repairs, except that upon satisfactory completion of such repairs, Lessor
shall deliver to Lessee any insurance proceeds received by Lessor for the
damage repaired by Lessee. Lessee shall give Lessor written notice of such
election within ten (10) days after receiving Lessor's termination notice.
(c) If the damage to the Property occurs during the last six (6) months of the
Lease Term and such damage will require more than thirty (30) days to
repair, either Lessor or Lessee may elect to terminate this Lease as of
the date the damage occurred, regardless of the sufficiency of any
insurance proceeds. The party electing to terminate this Lease shall give
written notification to the other party of such election within thirty
(30) days after ▇▇▇▇▇▇'s notice to Lessor of the occurrence of the damage.
Section 7.02. Substantial or Total Destruction.
If the Property is substantially or totally destroyed by any cause whatsoever
(i.e., the damage to the Property is greater than partial damage as described in
Section 7.01), and regardless of whether Lessor receives any insurance proceeds,
this Lease shall terminate as of the date the destruction occurred. If the
Property can be rebuilt within thirty (30) days after the date of destruction,
Lessor may elect to rebuild the Property at ▇▇▇▇▇▇'s own expense, in which case
this Lease shall remain in full force and effect. Lessor shall notify Lessee of
such election within thirty (30) days after ▇▇▇▇▇▇'s notice of the occurrence of
total or substantial destruction. If Lessor so elects, Lessor shall rebuild the
Property at Lessor's sole expense, except that if the destruction was caused by
an act or omission of Lessee, Lessee shall pay Lessor the difference between the
actual cost of rebuilding and any insurance proceeds received by Lessor
Section 7.03. Temporary Reduction of Rent.
If the Property is destroyed or damaged and Lessor repairs or restores the
Property pursuant to the provisions of this Article Seven, any rent payable
during the period of such damage, repair and/or restoration shall be reduced
according to the degree, if any, to which ▇▇▇▇▇▇'s use of the Property is
impaired. However, the reduction shall not exceed the sum of one year's payment
of Base Rent. Except for such possible reduction in Base Rent, Lessee shall not
be entitled to any compensation, reduction, or reimbursement from Lessor as a
result of any damage, destruction, repair, or restoration of or to the Property.
Section 7.04. Waiver.
Lessee waives the protection of any statute, code or judicial provision which
grants a Lessee the right to terminate a lease in the event of the substantial
or total destruction of the leased property. ▇▇▇▇▇▇ agrees that the provisions
of Article Seven shall govern the rights and obligations of ▇▇▇▇▇▇ and ▇▇▇▇▇▇ in
the event of any substantial or total destruction to the Property.
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ARTICLE EIGHT: CONDEMNATION
If all or any portion of the Property is taken under the power of eminent domain
or sold under the threat of that power (all of which are called "Condemnation"),
this Lease shall terminate as to the part taken or sold on the date the
condemning authority takes title or possession, whichever occurs first. If more
than twenty percent (20%) of the floor area of the Property is taken, either
Lessor or Lessee may terminate this Lease as of the date the condemning
authority takes title or possession, by delivering written notice to the other
within ten (10) days after receipt of written notice of such taking (or in the
absence of such notice, within ten (10) days after the condemning authority
takes title or possession). If neither Lessor nor Lessee terminates this Lease,
this Lease shall remain in effect as to the portion of the Property not taken,
except that the Base Rent and Additional Rent shall be reduced in proportion to
the reduction in the floor area of the Property. Any Condemnation award or
payment shall be distributed in the following order: (a) first, to any ground
Lessor, mortgagee or beneficiary under a deed of trust encumbering the Property,
the amount of its interest in the Property; (b) second, to Lessee, only the
amount of any award specifically designated for loss of or damage to ▇▇▇▇▇▇'s
trade fixtures or removable personal property; and (c) third, to Lessor, the
remainder of such award, whether as compensation for reduction in the value of
the leasehold, the taking of the fee, or otherwise. If this Lease is not
terminated, Lessor shall repair any damage to the Property caused by the
Condemnation, except that Lessor shall not be obligated to repair any damage for
which ▇▇▇▇▇▇ has been reimbursed by the condemning authority. If the severance
damages received by Lessor are not sufficient to pay for such repair, Lessor
shall, have the right to either terminate this Lease or make such repair at
Lessor's expense.
ARTICLE NINE: ASSIGNMENT AND SUBLETTING
Section 9.01. Lessor's Consent Required.
No portion of the Property or of ▇▇▇▇▇▇'s interest in this Lease may be acquired
by any other person or entity, whether by sale, assignment, mortgage, lease,
transfer, operation of law, or act of Lessee, without ▇▇▇▇▇▇'s prior written
consent, except as provided in Section 9.02 below. Lessor has the right to grant
or withhold its consent as provided in Section 9.05 below. Any attempted
transfer without consent shall be void and shall constitute a non-curable breach
of this Lease.
Section 9.02. Lessee Affiliate.
Lessee may assign this Lease or Lease the Property, without Lessor's consent, to
any corporation which controls, is controlled by or is under common control with
Lessee, or to any corporation resulting from the merger of or consolidation with
Lessee ("Lessee's Affiliate").
Section 9.03. No Release of Lessee.
No transfer permitted by this Article Nine, whether with or without ▇▇▇▇▇▇'s
consent, shall release Lessee or change ▇▇▇▇▇▇'s primary liability to pay the
rent and to perform all other obligations of Lessee under this Lease. ▇▇▇▇▇▇'s
acceptance of rent from any other person is not a waiver of any provision of
this Article Nine. Consent to one transfer is not a consent to any subsequent
transfer. If ▇▇▇▇▇▇'s transferee defaults under this Lease, Lessor may proceed
directly against ▇▇▇▇▇▇ without pursuing remedies against the transferee. Lessor
may consent to subsequent assignments or modifications of this Lease by ▇▇▇▇▇▇'s
transferee, without notifying Lessee or
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obtaining its consent. Such action shall not relieve ▇▇▇▇▇▇'s liability under
this Lease.
Section 9.04. Offer to Terminate.
If Lessee desires to assign the Lease or sublease the Property, Lessee shall
have the right to offer, in writing, to terminate the Lease as of a date
specified in the offer. If Lessor elects in writing to accept the offer to
terminate within twenty (20) days after notice of the offer, the Lease shall
terminate as of the date specified and all the terms and provisions of the Lease
governing termination shall apply. If Lessor does not so elect, the Lease shall
continue in effect until otherwise terminated and the provisions of Section 9.05
with respect to any proposed transfer shall continue to apply.
Section 9.05. Lessor's Consent
(a) ▇▇▇▇▇▇'s request for consent to any transfer described in Section 9.01
shall set forth in writing the details of the proposed transfer, including
the name, business and financial condition of the prospective transferee,
financial details of the proposed transfer (e.g., the term of and the rent
and security deposit payable under any proposed assignment or sublease),
and any other information Lessor deems relevant. Lessor shall have the
right to withhold consent, if reasonable, or to grant consent based on the
following factors: (i) the business of the proposed assignee or subtenant
and the proposed use of the Property; (ii) the net worth and financial
reputation of the proposed assignee or subtenant; (iii) Lessee's
compliance with all of its obligations under the Lease; and (iv) such
other factors as Lessor may reasonably deem relevant. If ▇▇▇▇▇▇ objects to
a proposed assignment solely because of the net worth and/or financial
reputation of the proposed assignee, Lessee may nonetheless sublease (but
not assign), all or a portion of the Property to the proposed transferee,
but only on the other terms of the proposed transfer.
(b) If Lessee assigns or subleases, the following shall apply:
(i) Lessee shall pay to Lessor as Additional Rent under the Lease the
Lessor's Share (stated in Section 1.13) of the Profit (defined
below) on such transaction as and when received by ▇▇▇▇▇▇, unless
▇▇▇▇▇▇ gives written notice to ▇▇▇▇▇▇ and the assignee or subtenant
that ▇▇▇▇▇▇'s Share shall be paid by the assignee or subtenant to
Lessor directly. The "Profit" means (A) all amounts paid to Lessee
for such assignment or sublease, including "key" money, monthly rent
in excess of the monthly rent payable under the Lease, and all fees
and other consideration paid for the assignment or sublease,
including fees under any collateral agreements, less (B) costs and
expenses directly incurred by Lessee in connection with the
execution and performance of such assignment or sublease for real
estate brokers commissions and costs of renovation or construction
of improvements required under such assignment or sublease and rent
paid by Lessee hereunder. Lessee is entitled to recover such costs
and expenses before Lessee is obligated to pay the Lessor's Share to
Lessor. The Profit in the case of a sublease of less than all the
Property shall be determined with references to the rent allocable
to the subleased space as a percentage on a square footage basis.
(ii) Lessee shall provide Lessor a written statement certifying all
amounts to be paid
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from any assignment or sublease of the Property within thirty (30)
days after the transaction documentation is signed, and Lessor may
inspect ▇▇▇▇▇▇'s books and records to verify the accuracy of such
statement. On written request Lessee shall promptly furnish to
Lessor copies of all the transaction documentation, all of which
shall be certified by Lessee to be complete, true and correct.
▇▇▇▇▇▇'s receipt of ▇▇▇▇▇▇'s Share shall not be a consent to any
further assignment or subletting. The breach of ▇▇▇▇▇▇'s obligation
under this Paragraph 9.05(b) shall be a material default of the
Lease.
Section 9.06. No Merger.
No merger shall result from ▇▇▇▇▇▇'s Lease of the Property under this Article
Nine, ▇▇▇▇▇▇'s surrender of this Lease or the termination of this Lease in any
other manner. In any such event, Lessor may terminate any or all subtenancies or
succeed to the interest of ▇▇▇▇▇▇ as sublandlord under any or all subtenancies.
ARTICLE TEN: DEFAULTS; REMEDIES
Section 10.01. Covenants and Conditions.
▇▇▇▇▇▇'s performance of each of ▇▇▇▇▇▇'s obligations under this Lease is a
condition as well as a covenant. ▇▇▇▇▇▇'s right to continue in possession of the
Property is conditioned upon such performance. Time is of the essence in the
performance of all covenants and conditions.
Section 10.02. Defaults.
Lessee shall be in material default under this Lease:
(a) If ▇▇▇▇▇▇'s vacation of the Property results in the cancellation of any
insurance described in Section 4.04;
(b) If Lessee fails to pay rent or any other charge when due;
(c) If Lessee fails to perform any of ▇▇▇▇▇▇'s non-monetary obligations under
this Lease for a period of thirty (30) days after written notice from
Lessor; provided that if more than thirty (30) days are required to
complete such performance, Lessee shall not be in default if Lessee
commences such performance within the thirty (30)-day period and
thereafter diligently pursues its completion. However, Lessor shall not be
required to give such notice if ▇▇▇▇▇▇'s failure to perform constitutes a
non-curable breach of this Lease. The notice required by this Paragraph is
intended to satisfy any and all notice requirements imposed by law on
Lessor and is not in addition to any such requirement.
(d) (i) If ▇▇▇▇▇▇ makes a general assignment or general arrangement for the
benefit of creditors; (ii) if a petition for adjudication of bankruptcy or
for reorganization or rearrangement is filed by or against Lessee and is
not dismissed within thirty (30) days; (iii) it a trustee or receiver is
appointed to take possession of substantially all of Lessee's assets
located at the Property or of ▇▇▇▇▇▇'s interest in this Lease and
possession is not restored to Lessee within thirty (30) days; or (iv) if
substantially all of Lessee's assets located at the Property or of
▇▇▇▇▇▇'s interest in this Lease is subjected to attachment, execution or
other judicial seizure which is not discharged within thirty (30) days. If
a
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court of competent jurisdiction determines that any of the acts described
in this subparagraph (d) is not a default under this Lease, and a trustee
is appointed to take possession (or if Lessee remains a debtor in
possession) and such trustee or Lessee transfers Lessee's interest
hereunder or subleases all or a portion of the Property, then Lessor shall
receive, as Additional Rent the excess, if any, of the rent (or any other
consideration) paid in connection with such assignment or sublease over
the rent payable by Lessee under this Lease.
(e) If any guarantor of the Lease revokes or otherwise terminates, or purports
to revoke or otherwise terminate, any guaranty of all or any portion of
Lessee's obligations under the Lease. Unless otherwise expressly provided,
no guaranty of the Lease is revocable.
Section 10.03. Remedies.
On the occurrence of any material default by Lessee, Lessor may, at any time
thereafter, with or without notice or demand and without limiting Lessor in the
exercise of any right or remedy which Lessor may have:
(a) Terminate ▇▇▇▇▇▇'s right to possession of the Property by any lawful
means, in which case this Lease shall terminate and ▇▇▇▇▇▇ shall
immediately surrender possession of the Property to Lessor. In such event
Lessor shall be entitled to recover from Lessee all damages incurred by
Lessor by reason of Lessee's default, including (i) the worth at the time
of the award of the unpaid Base Rent, Additional Rent and other charges
which ▇▇▇▇▇▇ had earned at the time of the termination: (ii) the worth at
the time of the award of the amount by which the unpaid Base Rent,
Additional Rent and other charges which Lessor would have earned after
termination until the time of the award exceeds the amount of such rental
loss that Lessee proves Lessor could have reasonably avoided; (iii) the
worth at the time of the award of the amount by which the unpaid Base
Rent, Additional Rent and other charges which Lessee would have paid for
the balance of the Lease Term after the time of award exceeds the amount
of such rental loss that Lessee proves Lessor could have reasonably
avoided; and (iv) any other amount necessary to compensate Lessor for all
the detriment proximately caused by ▇▇▇▇▇▇'s failure to perform its
obligations under the Lease or which in the ordinary course of things
would be likely to result therefrom, including, but not limited to, any
costs or expenses Lessor incurs in maintaining or preserving the Property
after such default, the cost of recovering possession of the Property,
expenses of releasing, including necessary renovation or alteration of the
Property, Lessor's reasonable attorneys' fees incurred in connection
therewith, and any real estate commission paid or payable. As used in
subparts (i) and (ii) above, the "worth at the time of the award" is
computed by allowing interest on unpaid amounts at the rate of fifteen
percent (15%) per annum, or such lesser amount as may then be the maximum
lawful rate. As used in subpart (iii) above, the "worth at the time of the
award" is computed by discounting such amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of the award, plus one
percent (1%). If ▇▇▇▇▇▇ has abandoned the Property, Lessor shall have the
option of (i) retaking possession of the Property and recovering from
Lessee the amount specified in this Paragraph 10.03(a), or (ii) proceeding
under Paragraph 10.03(b);
(b) Maintain ▇▇▇▇▇▇'s right to possession, in which case this Lease shall
continue in effect whether or not ▇▇▇▇▇▇ has abandoned the Property. In
such event, Lessor shall be
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entitled to enforce all of ▇▇▇▇▇▇'s rights and remedies under this Lease,
including the right to recover the rent as it becomes due;
(c) Terminate this Lease or pursue any other remedy now or hereafter available
to Lessor under the laws or judicial decisions of the state in which the
Property is located.
Section 10.04. Automatic Termination.
Notwithstanding any other term or provision hereof to the contrary, the Lease
shall terminate on the occurrence of any act which affirms the Lessor's
intention to terminate the Lease as provided in Section 10.03 hereof. On such
termination, Lessor's damages for default shall include all costs and fees,
including reasonable attorneys' fees that Lessor incurs in connection with the
filing, commencement, pursuing and/or defending of any action in any bankruptcy
court or other court with respect to the Lease; the obtaining of relief from any
stay in bankruptcy restraining any action to evict Lessee; or the pursuing of
any action with respect to Lessor's right to possession of the Property. All
such damages suffered (apart from Base Rent and other rent payable hereunder)
shall constitute pecuniary damages which must be reimbursed to Lessor prior to
assumption of the Lease by ▇▇▇▇▇▇ or any successor to ▇▇▇▇▇▇ in any bankruptcy
or other proceeding.
Section 10.05. Cumulative Remedies.
Lessor's exercise of any right or remedy shall not prevent it from exercising
any other right or remedy.
ARTICLE ELEVEN: PROTECTION OF LENDERS
Section 11.01. Subordination.
Lessor shall have the right to subordinate this Lease to any ground lease, deed
of trust or mortgage encumbering the Property, any advances made on the security
thereof and any renewals, modifications, consolidations, replacements or
extensions thereof, whenever made or recorded. Lessee shall cooperate with
Lessor and any lender which is acquiring a security interest in the Property or
the Lease. Lessee shall execute such further documents and assurances as such
lender may require, provided that ▇▇▇▇▇▇'s obligations under this Lease shall
not be increased in any material way (the performance of ministerial acts shall
not be deemed material), and Lessee shall not be deprived of its rights under
this Lease. ▇▇▇▇▇▇'s right to quiet possession of the Property during the Lease
Term shall not be disturbed if Lessee pays the rent and performs all of Lessee's
obligations under this Lease and is not otherwise in default. If any ground
Lessor, beneficiary or mortgagee elects to have this Lease prior to the lien of
its ground lease, deed of trust or mortgage and gives written notice thereof to
Lessee, this Lease shall be deemed prior to such ground lease, deed of trust or
mortgage whether this Lease is dated prior or subsequent to the date of said
ground lease, deed of trust or mortgage or the date of recording thereof.
Any subordination document prepared and presented to Lessee for execution
pursuant to this Section 11.01 shall contain non disturbance and attornment
provisions which are consistent with the terms of this Section.
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Section 11.02. Attornment.
If ▇▇▇▇▇▇'s interest in the Property is acquired by any ground Lessor,
beneficiary under a deed of trust, mortgagee, or purchaser at a foreclosure
sale, Lessee shall attorn to the transferee of or successor to ▇▇▇▇▇▇'s interest
in the Property and recognize such transferee or successor as Lessor under this
Lease. Lessee waives the protection of any statute or rule of law which gives or
purports to give Lessee any right to terminate this Lease or surrender
possession of the Property upon the transfer of ▇▇▇▇▇▇'s interest.
Section 11.03. Signing of Documents.
Lessee shall sign and deliver any instrument or documents necessary or
appropriate to evidence any such attornment or subordination or agreement to do
so. If Lessee fails to do so within ten (10) days after written request Lessee
shall be in material default of this Lease.
Section 11.04. Estoppel Certificates.
(a) Upon Lessor's written request, ▇▇▇▇▇▇ shall execute, acknowledge and
deliver to Lessor a written statement certifying: (i) that none of the
terms or provisions of this Lease have been changed (or if they have been
changed, stating how they have been changed); (ii) that this Lease has not
been canceled or terminated; (iii) the last date of payment of the Base
Rent and other charges and the time period covered by such payment; (iv)
that Lessor is not in default under this Lease (or, if Lessor is claimed
to be in default, stating why); and (v) such other representations or
information with respect to Lessee or the Lease as Lessor may reasonably
request or which any prospective purchaser or encumbrancer of the Property
may require. Lessee shall deliver such statement to Lessor within ten (10)
days after ▇▇▇▇▇▇'s request. Lessor may give any such statement by Lessee
to any prospective purchaser or encumbrancer of the Property. Such
purchaser or encumbrancer may rely conclusively upon such statement as
true and correct.
(b) If Lessee does not deliver such statement to Lessor within such ten
(10)-day period, Lessor, and any prospective purchaser or encumbrancer,
may conclusively presume and rely upon the following facts: (i) that the
terms and provisions of this Lease have not been changed except as
otherwise represented by Lessor; (ii) that this Lease has not been
canceled or terminated except as otherwise represented by Lessor; (iii)
that not more than one month's Base Rent or other charges have been paid
in advance; and (iv) that Lessor is not in default under the Lease. In
such event, Lessee shall be estopped from denying the truth of such facts.
ARTICLE TWELVE: LEGAL COSTS
Section 12.01. Legal Proceedings.
If Lessee or Lessor shall be in breach or default under this Lease, such party
(the "Defaulting Party") shall reimburse the other party (the "Non defaulting
Party") upon demand for any costs or expenses that the Non defaulting Party
incurs in connection with any breach or default of the Defaulting Party under
this Lease, whether or not suit is commenced or judgment entered. Such costs
shall include legal fees and costs incurred for the negotiation of a settlement,
enforcement of rights of otherwise. Furthermore, if any action for breach of, or
to enforce the provisions of
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this Lease is commenced, the court in such action shall award to the party in
whose favor a judgment is entered, a reasonable sum as attorneys fees and costs.
The losing party in such action shall pay such attorneys fees and costs. Lessee
shall also indemnify Lessor against and hold Lessor harmless from all costs,
expenses, demands and liability Lessor may incur if Lessor becomes or is made a
party to any claim or action (a) instituted by Lessee against any third party,
or by any third party against Lessee, or by or against any person holding any
interest under or using the Property by license of or agreement with Lessee; (b)
for foreclosure of any lien for labor or material furnished to or for Lessee or
such other person; (c) otherwise arising out of or resulting from any act or
transaction of Lessee or such other person; or (d) necessary to protect ▇▇▇▇▇▇'s
interest under this Lease in a bankruptcy proceeding, or other proceeding under
Title 11 of the United States Code, as amended. Lessee shall defend Lessor
against any such claim or action at ▇▇▇▇▇▇'s expense with counsel reasonably
acceptable to Lessor or, at Lessor's election, ▇▇▇▇▇▇ shall reimburse Lessor for
any legal fees or costs Lessor incurs in any such claim or action.
Section 12.02. Lessor's Consent.
Lessee shall pay Lessor's reasonable attorneys fees incurred in connection with
▇▇▇▇▇▇'s request for ▇▇▇▇▇▇'s consent under Article Nine (Assignment and
Subletting), or in connection with any other act which ▇▇▇▇▇▇ proposes to do and
which requires ▇▇▇▇▇▇'s consent.
ARTICLE THIRTEEN: MISCELLANEOUS PROVISIONS
Section 13.01. Non-Discrimination.
▇▇▇▇▇▇ promises, and it is a condition to the continuance of this Lease, that
there will be no discrimination against, or segregation of, any person or group
of persons on the basis of race, color, sex, creed, national origin or ancestry
in the leasing, subleasing, transferring, occupancy, tenure or use of the
Property or any portion thereof.
Section 13.02. Lessor's Liability; certain Duties.
(a) As used in this Lease, the term Lessor means only the current owner or
owners of the fee title to the Property or Property or the leasehold
estate under a ground lease of the Property or Property at the time in
question. Each Lessor is obligated to perform the obligations of Lessor
under this Lease only during the time such Lessor owns such interest or
title. Any Lessor who transfers its title or interest is relieved of all
liability with respect to the obligations of Lessor under this Lease to be
performed on or after the date of transfer. However, each Lessor shall
deliver to its transferee all funds that Lessee previously paid if such
funds have not yet been applied under the terms of this Lease.
(b) Lessee shall give written notice of any failure by ▇▇▇▇▇▇ to perform any
of its obligations under this Lease to Lessor and to any ground Lessor,
mortgagee or beneficiary under any deed of trust encumbering the Property
whose name and address have been furnished to Lessee in writing. Lessor
shall not be in default under this Lease unless Lessor (or such ground
Lessor, mortgagee or beneficiary) fails to cure such non-performance
within thirty (30) days after receipt of ▇▇▇▇▇▇'s notice. However, if such
non-performance reasonably requires more than thirty (30) days to cure,
Lessor shall not be in default if such cure is commenced within such
thirty (30)-day period and thereafter
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diligently pursued to completion.
(c) Notwithstanding any term or provision herein to the contrary, the
liability of Lessor for the performance of its duties and obligations
under this Lease is limited to ▇▇▇▇▇▇'s interest in the Property, and
neither the Lessor nor its partners, shareholders, officers or other
principals shall have any personal liability under this Lease.
Section 13.03. Severability.
A determination by a court of competent jurisdiction that any provision of this
Lease or any part thereof is illegal or unenforceable shall not cancel or
invalidate the remainder of such provision or this Lease, which shall remain in
full force and effect.
Section 13.04. Interpretation.
The captions of the Articles or Sections of this Lease are to assist the parties
in reading this Lease and are not a part of the terms or provisions of this
Lease. Whenever required by the context of this Lease, the singular shall
include the plural and the plural shall include the singular. The masculine,
feminine and neuter genders shall each include the other. In any provision
relating to the conduct, acts or omissions of Lessee, the term "Lessee" shall
include ▇▇▇▇▇▇'s agents, employees, contractors, invitees, successors or others
using the Property with ▇▇▇▇▇▇'s expressed or implied permission.
Section 13.05. Incorporation of Prior Agreements; Modifications.
This Lease is the only agreement between the parties pertaining to the lease of
the Property and no other agreements are effective. All amendments to this Lease
shall be in writing and signed by all parties. Any other attempted amendment
shall be void.
Section 13.06. Notices.
All notices required or permitted under this Lease shall be in writing and shall
be personally delivered or sent by certified mail, return receipt requested,
postage prepaid. Notices to Lessee shall be delivered to the address specified
in Section 1.03 above, except that upon ▇▇▇▇▇▇'s taking possession of the
Property, the Property shall be ▇▇▇▇▇▇'s address for notice purposes. In
addition to the foregoing, notice to Lessee shall require delivery to the
following addresses:
1. ▇▇▇▇, St. Pierre
c/o ▇▇▇▇ ▇▇▇▇▇▇
▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
AND
2. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Notices to Lessor shall be delivered to the address specified in Section 1.02
above. All notices shall be effective upon delivery. Either party may change its
notice address upon written notice to the other party.
Page 19
21
Section 13.07. Waivers.
All waivers must be in writing and signed by the waiving party. Lessor's failure
to enforce any provision of this Lease or its acceptance of rent shall not be a
waiver and shall not prevent Lessor from enforcing that provision or any other
provision of this Lease in the future. No statement on a payment check from
Lessee or in a letter accompanying a payment check shall be binding on Lessor.
Lessor may, with or without notice to Lessee, negotiate such check without being
bound to the conditions of such statement.
Section 13.08. No Recordation.
Lessee shall not record this Lease without prior written consent from Lessor.
However, either Lessor or Lessee may require that a "Short Form" memorandum of
this Lease executed by both parties be recorded. The party requiring such
recording shall pay all transfer taxes and recording fees.
Section 13.09. Binding Effect; Choice of Law.
This Lease binds any party who legally acquires any rights or interest in this
Lease from Lessor or Lessee. However, ▇▇▇▇▇▇ shall have no obligation to
▇▇▇▇▇▇'s successor unless the rights or interests of ▇▇▇▇▇▇'s successor are
acquired in accordance with the terms of this Lease. The laws of the State of
Florida shall govern this Lease.
Section 13.10. Authority.
Lessee is a corporation, and each person signing this Lease on behalf of ▇▇▇▇▇▇
represents and warrants that he has full authority to do so and that this Lease
binds the Lessee. ▇▇▇▇▇▇ agrees to provide Lessor evidence of the Lessee's power
and authority to enter into this Lease as reasonably requested by ▇▇▇▇▇▇.
Section 13.11. Force Majeure.
If Lessor or Lessee cannot perform any of its obligations due to events beyond
Lessor's or ▇▇▇▇▇▇'s control, the time provided for performing such obligations
shall be extended by a period of time equal to the duration of such events.
Events beyond Lessor's or ▇▇▇▇▇▇'s control include, but are not limited to, acts
of God, war, civil commotion, labor disputes, strikes, fire, flood or other
casualty, shortages of labor or material, government regulation or restriction
and weather conditions.
Section 13.12. Execution of Lease.
This Lease may be executed in counterparts and, when all counterpart documents
are executed, the counterparts shall constitute a single binding instrument.
Lessor's delivery of this Lease to Lessee shall not be deemed to be an offer to
lease and shall not be binding upon either party until executed and delivered by
both parties.
Section 13.13. Survival.
All representations and warranties of Lessor and Lessee shall survive the
termination of this Lease.
Page 20
22
ARTICLE FOURTEEN: BROKERS
Section 14.01. Broker's Fee.
When this Lease is signed by and delivered to both Lessor and ▇▇▇▇▇▇, Lessor
shall pay a real estate commission to ▇▇▇▇▇▇'s Broker named in Section 1.08
above, if any, as provided in the written agreement between Lessor and ▇▇▇▇▇▇'s
Broker. Lessor shall pay Lessor's Broker a commission if Lessee exercises any
option to extend the Lease Term or to buy the Property, or any similar option or
right which Lessor may grant to Lessee, or if Lessor's Broker is the procuring
cause of any other lease or sale entered into between Lessor and Lessee covering
the Property. Such commission shall be the amount set forth in Lessor's Brokers
commission schedule in effect as of the execution of this Lease. If a Lessee's
Broker is named in Section 1.08 above, ▇▇▇▇▇▇'s Broker shall pay an appropriate
portion of its commission to Lessee's Broker if so provided in any agreement
between Lessor's Broker and ▇▇▇▇▇▇'s Broker. Nothing contained in this Lease
shall impose any obligation on Lessor to pay a commission or fee to any party
other than ▇▇▇▇▇▇'s Broker.
Section 14.02. Protection of Brokers.
If Lessor sells the Property, or assigns ▇▇▇▇▇▇'s interest in this Lease, the
buyer or assignee shall, by accepting such conveyance of the Property or
assignment of the Lease, be conclusively deemed to have agreed to make all
payments to ▇▇▇▇▇▇'s Broker thereafter required of Lessor under this Article
Fourteen. ▇▇▇▇▇▇'s Broker shall have the right to bring a legal action to
enforce or declare rights under this provision. The prevailing party in such
action shall be entitled to reasonable attorneys' fees to be paid by the losing
party. Such attorneys' fees shall be fixed by the court in such action. This
Paragraph is included in this Lease for the benefit of ▇▇▇▇▇▇'s Broker.
Section 14.03. Agency Disclosure; No Other Brokers; Transaction Brokerage
Lessor and Lessee each warrant that they have dealt with no other real estate
broker(s) in connection with this transaction except ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ OF
ARIZONA, INC., ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ OF FLORIDA, INC., ▇▇.
▇▇▇ ▇▇▇▇▇▇▇▇▇ who both represent Lessor under a certain National Agreement
"Lessor's Broker" and ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ OF FLORIDA, INC., ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
who represents the Lessee, "Lessee's Broker".
Lessor and ▇▇▇▇▇▇ acknowledge that ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ represents both Lessor
and ▇▇▇▇▇▇ and hereby consent to such intermediary representation. Furthermore,
▇▇▇▇▇▇ and ▇▇▇▇▇▇ understand and accept this representation creates a situation
of transaction brokerage.
ARTICLE FIFTEEN: EXTENSION OPTION
In the event Lessee is not in default of any terms and conditions of this Lease,
Lessee may extend this Lease for two periods of six (6) months each, the first
from February 1, 2000 through July 31, 2000 and the second from August 1, 2000
through January 31, 2001. Each extension option shall be granted to Lessee
provided Lessor has received ninety (90) - days' prior written notice of
▇▇▇▇▇▇'s intention to extend. During such extended term, the terms and
conditions of this Lessee shall remain the same.
Page 21
23
Lessor and ▇▇▇▇▇▇ have signed this Lease at the place and on the dates specified
adjacent to their signatures below and have initialed all Riders which are
attached to or Incorporated by reference in this Lease.
"Lessor"
Signed on June 5, 1998 ▇▇▇▇▇▇▇ Companies Inc., an
Oklahoma Corporation.
at Oklahoma City, Oklahoma
Witness: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇ ▇▇▇▇▇
------------------------- ----------------------------
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
-------------------------
Its: Vice President Logistics
----------------------------
"Lessee"
Signed on June 1st, 1998 Gildan Activeware, a Canadian
Corporation
at Minneapolis, Minnesota
Witness: /s/ ▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------- ------------------------------
Its: Chairman & Chief Executive
-----------------------------
Officer
IN ANY REAL ESTATE TRANSACTION, IT IS RECOMMENDED THAT YOU CONSULT WITH A
PROFESSIONAL, SUCH AS A CIVIL ENGINEER, INDUSTRIAL HYGIENIST OR OTHER PERSON
WITH EXPERIENCE IN EVALUATING THE CONDITION OF THE PROPERTY, INCLUDING THE
POSSIBLE PRESENCE OF ASBESTOS, HAZARDOUS MATERIALS AND UNDERGROUND STORAGE
TANKS. ADDITIONALLY, IT IS RECOMMENDED THAT YOU CONSULT WITH YOUR LEGAL COUNSEL
REGARDING THE TERMS AND CONDITIONS OF THIS LEASE.
Page 22
24
ASSIGNMENT OF LEASE
================================================================================
THIS AGREEMENT ENTERED INTO AT THE CITY OF ________________, PROVINCE OF QUEBEC,
AS OF THE __________ DAY OF ____________________, 19__, BY AND BETWEEN:
GILDAN ACTIVEWEAR INC., a duly incorporated corporation having its
principal place of business at ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇▇ of
St-Laurent, Province of Quebec, hereinacting and represented by Mr. ▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, its Chairman, hereunto duly authorized for all purposes
hereof as he so declares
(hereinafter called the "Assignor");
-AND-
MIAMI ACTIVEWEAR DISTRIBUTION INC., a duly incorporated corporation having
its principal place of business at ________________, in the City of Miami,
in the State of Florida, hereinacting and represented by Mr. _____________
its _______________________, hereunto duly authorized for all purposes
hereof as he so declares
(hereinafter called the "Assignee");
W I T N E S S E T H:
WHEREAS by a lease dated the 28th day of May, 1998 (hereinafter called the
"Lease") between ▇▇▇▇▇▇▇ Companies, Inc. an Oklahoma corporation, as landlord,
(hereinafter called the "Lessor") and the Assignor, as tenant, the Lessor leased
to the Assignor approximately 210,654 square feet of warehouse space of the
▇▇▇▇▇▇▇ Miami Facility located at ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇
(hereinafter called the "Leased Premises") for a term commencing on the 1st day
of July, 1998 and ending on the 31st day of January, 2000, (hereinafter called
the "Term"); and
25
Assignment of Lease .../2
--------------------------------------------------------------------------------
WHEREAS the Assignor is desirous of assigning the Lease to the Assignee who is
desirous of acquiring same, the whole in accordance with the terms and
conditions hereinafter set forth;
NOW, THEREFORE, THE PARTIES HERETO HEREBY COVENANT AND AGREE AS FOLLOWS:
1. The preamble hereto shall be deemed to form an integral part hereof as if
recited herein at length.
2. For and in consideration of the sum of One Dollar ($1.00) and other good
and valuable consideration paid by the Assignee to the Assignor, the
sufficiency of which and receipt whereof are hereby acknowledged by the
Assignor, the Assignor hereby assigns to the Assignee the Lease and any
and all of Assignor's rights, title and interest in and to the Lease, the
whole for the unexpired residue of the Term, as hereinafter modified, and
all benefits to be derived therefrom, subject to the payment of the rent
and the observance and performance of the covenants, provisos and
conditions on the part of the Assignor contained therein.
3. The Assignee hereby acknowledges that the Leased Premises are accepted on
an "as is" basis without any warranty whatsoever and covenants with the
Assignor that:
a) the Assignee will throughout the unexpired residue of the Term, as
hereinafter modified, pay all rents reserved at the times and in the
manner provided in the Lease and observe and perform the covenants,
provisos and conditions on the part of the Assignor therein set
forth; and
b) the Assignee will indemnify and save harmless the Assignor from all
actions, suits, costs, losses, damages and expenses (including legal
fees) resulting from or in respect of any breach by Assignee of the
covenants stipulated in this paragraph 3.
4. The parties hereto agree to do all acts and things and sign all documents
necessary to give full force and effect to all of the provisions hereof.
26
Assignment of Lease .../3
--------------------------------------------------------------------------------
5. The provisions of this instrument shall be binding upon and shall inure to
the benefit of the Assignor and its legal representatives, successors or
assigns, and upon the Assignee, its successors and assigns.
6. This Assignment is intended to bind and apply to the parties herein
referred to as well as to their successors.
7. This agreement shall be interpreted and construed in accordance with the
laws of the state of Florida.
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE SIGNED ON THE DATE AND AT THE PLACE
FIRST HEREINABOVE MENTIONED.
Gildan Activewear Inc.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Per: /s/ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------- ---------------------------
Witness ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇. ▇▇▇▇▇▇▇
---------------------------
Witness
Miami Activewear Distribution Inc.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Per: /s/ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------- ---------------------------
Witness ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇. ▇▇▇▇▇▇▇
---------------------------
Witness
The foregoing instrument was acknowledged before me this 25 day of August, 1998,
by ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, on behalf of Gildan Activewear Inc. and of Miami
Activewear Distribution Inc.
/s/ ▇▇▇ ▇▇▇▇▇▇
---------------------------[SEAL]
Commissioner for oaths for
the City and District of Montreal