Exhibit 10.2
SUBLEASE
This Sublease made on the 6th day of July, 1994, by and between UNIT
DISTRIBUTION OF UTAH, INC., a Utah Corporation ("Sublessor"), and PROFORM
FITNESS PRODUCTS, INC., a Utah Corporation and WESLO, INC., a Utah Corporation
(hereafter collectively "Sublessee").
RECITALS:
A. Unit Distribution of Utah, Inc. is the Lessee from the Prudential
insurance Company of America of Warehouse Premises located in Clearfield, Utah,
and desires to sublease said Premises to ProForm. Fitness Products, Inc. and
Weslo, Inc. under certain terms and conditions as set forth herein.
B. ProForm Fitness Products, Inc. and Weslo, Inc. desire to sublease a
portion of said Premises from Unit Distribution of Utah, Inc.
C. A copy of the Lease Agreement between the Prudential Insurance Company
of America and Unit Distribution of Utah, Inc. has been received and reviewed by
all parties and is attached as Exhibit "A".
NOW, THEREFORE, in consideration of the covenants and promises hereinafter
set forth, and other good and valuable consideration, the receipt sufficiency of
which is hereby acknowledged, the parties agree as follows:
1. PARTIES.
This Sublease is made between Unit Distribution of Utah, Inc., a Utah
Corporation, and ProForm, Fitness Products, Inc., a Utah Corporation, and
Weslo, Inc., a Utah Corporation.
2. MASTER LEASE.
Sublessor is the Lessee under a written lease (hereafter "Master Lease,,)
attached and incorporated as Exhibit "A", dated January 29, 1990, wherein
the Prudential Insurance Company of America, a New Jersey Corporation
("Lessor"), leased to Sublessor the real property located in Clearfield,
Weber County, Utah, described as that certain real property situated at
1051 South Industrial Parkway, consisting of a warehouse building
containing approximately 615,000 square feet, together with all
improvements and appurtenances belonging to said property (hereafter
"Master Premises").
3. PREMISES.
Sublessor hereby subleases to Sublessee a portion of the Premises located
at 1051 South Industrial Parkway, Clearfield, Weber County, Utah, which is
approximately 325,325 square feet of warehouse space located at the
southerly end of the building on the Master Premises and approximately
3,750 square feet of office space in the Building
(approximately the northwest one-fourth of the office space) of the Master
Premises, plus the exclusive use of a portion of the parking facilities
adjacent to the north end of the building. The warehouse space, office
space and parking facilities subleased by Sublessee are shown and outlined
in red on Exhibit "B" attached and incorporated and are referenced
collectively as "Premises". The Premises include exclusive use of 30
parking stalls as shown on Exhibit B, with reasonable access to the same
(hereafter "Parking"). All space as shown on Exhibit "B" will be made
available to Sublessee as agreed. In addition Sublessee is granted a
non-exclusive easement for parking, loading and unloading of
tractor/trailers and use by other shipping vehicles and containers on the
west side of the Building, i.e., north of the storage pond and between the
Building and the road hereafter "Trailer Parking"). Sublessee will be
responsible for 54.20% of the maintenance costs of the Trailer Parking area
during the Sublease term. The Premises also include reasonable and adequate
rights of ingress and egress and for utility service from the Premises to a
publicly dedicated road and public utilities.
4. WARRIANTIES BY SUBLESSOR.
Sublessor warrants and represents to Sublessee as follows:
(a) As of the date hereof, the Master Lease has not been amended or
modified.
(b) As of the date of this Sublease that the Master Lease is in full force
and effect in accordance with its terms and that Sublessor is not now and
at this time knows of no events which will cause it to be in default or
breach of any of the provisions of the Master Lease.
(c) Sublessor has no knowledge of any claim by Lessor that Sublessor is in
default or breach of any of the provisions of the Master Lease.
(d) Sublessor has the right to enter into this Sublease Agreement with
Sublessee, without the prior written consent of Lessor.
(e) Sublessor will defend the Sublessee's right to possession of the
Premises against any and all claims and causes of action, except any
arising through the fault or neglect of Sublessee.
(f) Sublessor shall timely perform all acts required of it under the
Master Lease with Lessor in regard to payment of rent, notices, accounting,
making reports and otherwise so as to maintain the Master Lease with Lessor
in full force and effect and avoid any default thereunder.
5. TERM AND RENEWAL.
Providing this Sublease is fully executed by both parties no later than
July 8, 1994, the term of this Sublease shall commence on July 21, 1994
("Commencement Date"). This Sublease shall terminate" on June 30, 1999
("Termination Date"), unless otherwise sooner terminated in accordance with
the provisions of this Sublease, or unless extended as herein provided.
Sublessor hereby grants to Sublessee a right to renew the Sublease until
December 31, 2003, provided Sublessee is not in default, has fully
performed all its
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obligations stated herein at the time for such renewal, and provided
Sublessee gives written notice to Sublessor at least three (3) months prior
to June 30, 1999. Upon Sublessee's written notice to Sublessor, this
Sublease shall be extended for the period July 1, 1999, through, and
including, December 31, 2003 ("Option Period"). The rental rate during said
Option Period shall be as follows: Commencing July 1, 1999, through the
next adjustment date as established in Section 7.1 below, the minimum rent
shall remain the same as that paid for the previous month. During the term
of the Option Period, the minimum rent shall be increased on the first day
of the next month after the adjustment date by the percentage increase in
the CPI for the twelve (12) month period immediately preceding said
adjustment date. However, notwithstanding the foregoing, in no event shall
the minimum rent during this Option Period increase on any adjustment date
by more than three percent (3%) of the minimum rent payable immediately
prior to such adjustment date.
6. POSSESSION.
Sublessor and Sublessee agree that possession of the Premises shall be
delivered to the Sublessee as follows:
a. July 21, 1994 75,000 sq. ft., 3,750 sq. ft. of Office
Space, and all Parking
b. August 5, 1994 An additional 75,000 sq. ft.
c. August 20, 1994 An additional 75,000 sq. ft.
d. September 4, 1994 100,325 sq. ft. and all remainder of the
Premises
TOTAL 329,075 sq. ft.
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The selection of the area to which possession is given to Sublessee shall
be as reasonably selected by Sublessor and approved by Sublessee and shall
be contiguous to that of which Sublessee is already in possession.
Sublessor has been advised by Sublessee that it is a material term of this
Sublease that possession be delivered in a timely manner.
7. RENT.
7.1 Minimum Rent. Sublessee shall pay to Sublessor as a minimum rent,
without deduction, setoff, notice, or demand, at 1301 Gulf Life Drive,
Suite 1800, Jacksonville, Florida 32207, or at such other place as
Sublessor shall designate from time to time by notice to Sublessee,
the sum of Sixty-Five Thousand Sixty-Five Dollars ($65,065.00) per
month, in advance on the first day of each month of the term. If the
Commencement Term begins or ends on a day other than the first or last
day of a month, the rent for the partial month shall be prorated on a
per diem basis. During the term of this Sublease, the minimum rent
shall be increased on the annual anniversary date by the percentage
increase in the CPI for the
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twelve (12) month period immediately preceding said adjustment date.
However, notwithstanding the foregoing, in no event shall the minimum
rent during the term of this Sublease increase on any adjustment date
by more than three percent (3%) of the minimum rent payable
immediately prior to such adjustment date. Since possession of the
Premises shall be given to Sublessee on an incremental basis, as set
forth in Section 6 above, the prorated rent shall be the square
footage of which Sublessee is in possession divided by 329,075
multiplied by $65,065.00 (rate of $.20 per square foot per month).
There shall be no adjustments for the Trailer Parking or Parking.
7.2 Taxes and Insurance Costs. Sublessee shall pay to Sublessor as
additional rent .5351 percent (53.51%) of the taxes and insurance as
required by the Master Lease on the Master Premises, prorated `as of
the Commencement Date and/or the Termination Date, whichever the case
may be, to cover only the period of time within the year or policy
period during which the term of this Lease shall be in effect. The
insurance shall name Sublessee as an additional insured and costs
chargeable to Sublessee shall be reasonably apportioned based upon the
square footage of the Premises, but in no event shall such costs
chargeable to Sublessee be greater than that which Sublessee can
obtain directly for comparable coverage from an insurance carrier with
a rating as good or better than that coverage through which Sublessor
insures as shown by "Best' s Insurance Reports Property - Casualty".
Sublessor shall provide Sublessee with a copy of the insurance
policies with the insurance coverages as required by this Sublease and
by the Master Lease and agrees to keep the same in full force and
effect with a thirty (30) day notice to Sublessee prior to
cancellation" provision in each such policy.
7.3. Operating Costs. Except as specifically otherwise provided in this
Sublease, if the Master Lease requires Sublessor to pay to Lessor all
or a portion of the expenses of operating, maintaining, repairing, or
replacing the building and/or project, or the components thereof, of
which the Premises are a part ("Operating Costs"), including, but not
limited to taxes, utilities, insurance, exterior and interior
maintenance, and common area maintenance, the Sublessee shall pay to
Sublessor as additional rent .5351 percent (53.51%) of the amounts
payable by Sublessor for Operating Costs incurred during the Term.
Such additional rent shall be payable as and when Operating Costs are
payable by Sublessor to Lessor. If the Master Lease provides for the
payment by Sublessor of Operating Costs on the basis of an estimate
thereof, then as and when adjustments between estimated and actual
Operating Costs are made under the Master Lease, the obligations of
Sublessor and Sublessee hereunder shall be adjusted in a like manner;
and if any such adjustment shall occur after the expiration or earlier
termination of the Term, then the obligations of Sublessor and
Sublessee under this Subsection 7.3 shall survive such expiration or
termination. Sublessor shall, upon request by Sublessee, furnish
Sublessee with copies of all statements submitted by Lessor of actual
or estimated Operating Costs during the Term.
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8. UTILITY COSTS.
In the office space (3,750 square feet an the Premises out of 15,000 square
feet of office space in the Master Premises), charges for gas, electrical
and other utilities that are not separately metered shall be paid on a pro
rata basis, i.e., twenty-five percent (25%) to Sublessee and seventy-five
percent (75%) to Sublessor. in the warehouse space (325,325 square feet on
the Premises out of 600,000 square feet of warehouse space in the Master
Premises), charges for gas and other utilities that are not separately
metered shall be paid on a pro rata basis, i.e., fifty-four and two tenths
percent (54.2%) to Sublessee and forty-five and eight tenths percent
(45.8%) to Sublessor. Electric usage shall be separately metered for the
warehouse space.
9. OTHER OPERATING/MAINTENANCE COSTS AND FUNCTIONS.
(a) Sublessor shall be granted access to the Premises on a reasonable
basis to take appropriate action to maintain Sublessor's food grade status.
Such access shall be no more frequently than once weekly, shall be
scheduled so as to not interfere with Sublessor's business /warehouse
operations, and shall be at Sublessor's sole expense. Sublessor warrants
that such actions by Sublessor shall have no effect on Sublessee's business
operations, employees, products or other property, nor shall such access by
Sublessor cause Sublessee any increase in its costs of doing business.
(b) Sublessee, at its expense, shall provide its own security and
janitorial services to the Premises and shall maintain the same in a manner
consistent with that as evidenced by the Sublessor. Sublessor, at its
expense, shall provide its own security and janitorial services for the
balance of the Master Premises.
(c) Sublessor shall provide and pay for all roof and structural repair,
replacement and maintenance, subject to the provisions of Section 9 (e)
below. Sublessor agrees to commence with the replacement of the roof on the
Master Premises by no later than September 30, 1994, and shall diligently
proceed to complete the replacement in a timely manner.
(d) At the commencement of this sublease, Sublessor shall make the
necessary repairs to Sublessee's portion of the parking lot marked for
Sublessee's exclusive use on Exhibit "B" of this Agreement. It shall be
Sublessee's responsibility to maintain and/or repair this portion of the
parking lot as needed during this Sublease term, or any extension thereof.
Sublessor agrees to he responsible for the maintenance or repair of the
main access road (Industrial Parkway). The drivelanes on the Master
Premises used on a non-exclusive basis by both parties shall be maintained
.5351 percent (53.51%) by Sublessee and .4649 percent (46.49%) by
Sublessor.
(e) Sublessor and Sublessee shall each be responsible for any damages
caused to the Premises by its own negligence or due to the acts of their
respective agents, employees, customers or invitees, respectively.
(f) Except as specifically otherwise provided, Sublessee shall be
responsible for all other operating, repair and maintenance expenses of the
Premises and Sublessor shall be
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responsible for all other operating, repair and maintenance expenses of the
Master Premises (excluding the Premises).
(g) Sublessor agrees that Sublessee shall incur no expenses for repair,
maintenance or replacement of the mechanical systems (including without
limitation, HVAC system, electrical system, overhead doors and plumbing
system) for 30 days after the Commencement Date and Sublessor shall pay for
the same, except as caused through acts of Sublessee as provided in Section
9.e., above.
10. ADVANCE RENT PAYMENT.
As security for Sublessee's faithful performance of Sublessee's obligations
hereunder, Sublessee shall, concurrent with the execution of this Sublease,
deliver to Sublessor the sum of One Hundred Thirty Thousand One Hundred and
Thirty Dollars ($130,130.00) ("Advance Rent").
Of the Advance Rent $65,065.00 shall be a prepayment of the first full
month's rent after Sublessee has received possession of all the Premises,
and the other $65,065.00 shall be security for Sublessee's performance of
the terms of this Sublease.
If during the first year of the Sublease term, Sublessee does not receive
written notification from Sublessor that it has defaulted on any of its
obligations, as set forth in this Sublease, then it may apply the
$65,065.00 Advance Rent towards the fourteenth (14th) calendar month for
which rent is due. In the event Sublessee does default on any of its
obligations during the first year of the Sublease term, then Sublessee will
be required to maintain the Advance Rent throughout the balance of the
Sublease term.
11. DAMAGE AND DESTRUCTION.
(a) Sublessee shall notify Sublessor in writing immediately upon the
occurrence of any damage large enough to be subject to an insurance claim
to the Premises. If the Premises shall be partially damaged by fire or any
other casualty insured under Sublessor's insurance policy, Sublessor shall,
upon receipt of the insurance proceeds, repair the Premises and until
repair is complete the rent shall he abated proportionately as to that
portion of the Premises rendered untenantable. Notwithstanding the
foregoing, if: (a) the Premises by reason of such occurrence are rendered
wholly untenantable for Sublessee's purposes, or (b) the Premises should be
damaged as a result of a risk which is not covered by Sublessor's
insurance, or (c) the Premises or the building of which it is a part,
whether the Premises are damaged or not, should be damaged to the extent of
forty percent (40%) or more of the then-monetary value, then and in any
such events, Sublessor may either elect to repair the damage or may cancel
this Sublease by notice of cancellation within thirty (30) days after such
event and thereupon this Sublease shall expire, and Sublessee shall vacate
and surrender the Premises to Sublessor within a reasonable time.
Sublessee's liability for rent upon the termination of this Sublease shall
cease as of the day following Sublessor's giving notice of cancellation. In
the event Sublessor elects to repair any damage, any abatement of rent
shall end five (5) days after notice by Sublessor to Sublessee that the
Premises have been repaired.
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(b) During the last year of the Lease, if the Premises is partially or
totally destroyed by any cause whatsoever, and regardless of whether any
insurance proceeds are available, this Sublease shall terminate as of the
date the destruction occurred, at the election of either party, and
Sublessee shall assign any insurance proceeds on the Premises to Sublessor.
12. HAZARDOUS MATERIALS.
(a) As used in this Sublease, 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 regulation, including without limitation
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. Sublessee shall not cause
or permit any Hazardous Material to be generated, produced, brought upon,
used, stored, treated or disposed of in or about the Premises by Sublessee,
its agents, employees, contractors, or invitees without prior written
consent of Sublessor. Consent is hereby given to Sublessee's use of
standard cleaning agents, labeling paints and inks used in the ordinary
course of a warehouse business operation. Sublessee agrees to provide
Sublessor concurrent with the execution of this Sublease a written list
with the substance and approximate quantity to be stored at any time on the
Premises. Sublessee is responsible for making any required modifications to
meet current codes regarding storage of such substances. If storage of such
substances causes Sublessor's insurance costs to increase, Sublessee shall
be responsible for payment of the amount of such increased costs.
(b) During the term hereof, Sublessee shall comply with the requirements
of all applicable Federal, state and local environmental, health, safety
and sanitation laws, ordinances, codes, rules and regulations and orders of
any regulatory and administrative authority with respect to Sublessee's
occupancy and actions of its employees, invitees, or agents.
(c) During the term hereof, Sublessor shall comply with the requirements
of all applicable Federal, state and local environmental, health, safety
and sanitation laws, ordinances, codes, rules and regulations and orders of
any regulatory and administrative authority with respect to Sublessor's
occupancy and actions of its employees, invitees, or agents.
(d) Sublessee agrees to indemnify, defend and hold harmless the Sublessor
from and against all loss, liability, damage and expense, including costs
associated with administrative and judicial proceedings, remediation to
acceptable standards, and attorney's fees, ever suffered or incurred by
Sublessor on account of Sublessee's occupancy and actions or non-actions of
its employees, agents or invitees for (i) failure to comply with any
environmental, health, safety or sanitation law, code, ordinance, rule or
regulation or any interpretation or order of any regulatory or
administrative authority with
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respect thereto; (ii) release of hazardous materials or substances on,
upon, in or from the premises; and (iii) all damages to natural resources
or real property and/or harm or injury to persons resulting or alleged to
have resulted from such failure to comply and/or release of hazardous
material or substances. Sublessee shall not be responsible for any
environmental conditions existing prior to its use or occupancy of the
Premises or caused by other Tenants or Sublessor. As of the commencement
date of this Sublease, Sublessor represents, or the best of its knowledge
or belief, that there exists no environmental violation of any law or
regulation on the Master Premises.
(e) Sublessor agrees to indemnify, defend and hold harmless the Sublessee
from and against all loss, liability, damage and expense, including costs
associated with administrative and judicial proceedings, remediation to
acceptable standards, and attorney's fees, ever suffered or incurred by
Sublessee on account of Sublessor's business use, condition on, or
substances maintained upon the Master Premises (excluding the Premises) and
actions or non-actions of its employees, agents or invitees for (i) failure
to comply with any environmental, health, safety or sanitation law, code,
ordinance, rule or regulation or any interpretation or order of any
regulatory or administrative authority with respect thereto; (ii) release
of hazardous materials or substances on, upon in or from the premises; and
(iii) all damages to natural resources or real property and/or harm or
injury to persons resulting or alleged to have resulted from such failure
to comply and/or release of hazardous material or substances.
(f) The provisions of Sections 9a through 9e shall survive the termination
of this Sublease for a period of three (3) years.
13. USE OF PREMISES.
The Premises shall be used and occupied only for warehousing, assembly,
offices, and for no other uses or purposes.
14. ASSIGNMENT AND SUBLETTING.
(a) Sublessee shall not assign this Sublease, or further sublet all or any
part of the Premises, without the prior written consent of Sublessor (and
the consent of Lessor, if such is required under the terms of the Master
Lease), which consent cannot be unreasonably refused, and which consent
must be given in a timely manner.
(b) Sublessee shall pay to Sublessor as Additional Rent under the Lease
fifty percent (50%) of the Profit (defined below) on such transaction as
and when received by Sublessee. The "Profit" means all amounts paid to
Tenant for such assignment or sublease, including "buy-in" money and
monthly rent in excess of the monthly rent payable under the Lease.
Sublessee is entitled to recover such costs and expenses directly incurred
by Sublessee in connection with the execution and performance of such
sublease or assignment (for real estate broker's commissions and costs of
renovation or construction of tenant improvements required under such
assignment or sublease) before Sublessee is obligated to pay to Sublessor
its share of any Profit.
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15. LANDLORD'S CONSENT.
Sublessee's request for consent to any transfer 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 Sublessor deems relevant.
16. SUBLESSOR'S RIGHTS, DUTIES AND RESPONSIBILITIES.
(a) Sublessor shall provide Sublessee with copies of any minutes/records
of meetings with the Lessor, annual inspection reports or Approved Capital
Expenditures, as provided in the Master Lease, and shall disclose any
material defects or conditions for which the costs for remedy of the same
are chargeable to Sublessee under this Sublease or which conditions will
have a material adverse effect on Sublessee's use of the Premises.
(b) Sublessor hereby irrevocably and unconditionally waives, releases and
relinquishes any claim to a Landlord's" lien, against any property of
Sublessee on the Premises, including but not limited to inventory and
equipment. In connection with this, Sublessor agrees to execute such
documents as may be reasonably required by Sublessee's lender.
(c) Sublessor agrees, at its expense, to provide and install interior
chain link fencing no less than 12 feet (12') in a secure height dividing
the warehouse Premises from the Master Premises. The fencing shall be
installed within fourteen (14) days after the date Sublessee is scheduled
to receive possession of all the Premises.
(d) Sublessor warrants the Railroad Spur Agreement is in full force and
effect. Sublessee shall incur no costs for said Agreement unless it chooses
to utilize railroad spur services. If Sublessee utilizes the railroad spur
services, it will pay 53.51% of the cost thereafter incurred to maintain
the Railroad Spur Agreement in full force and effect. Sublessor shall keep
the Railroad Spur Agreement in full force and effect during the term of
this Sublease.
(e) On or before the date on which sublessee is delivered possession of
all the Premises, Sublessor shall at its expense provide a separate
electrical meter for the warehouse portion of the Premises.
(f) Sublessor agrees to relocate the area currently housing its pesticides
to a location contained entirely within Sublessor's premises and copies of
Material Safety Data Sheets for all pesticides so stored will be supplied
to Sublessee in a timely manner.
17. SUBLESSEE'S RIGHTS, DUTIES AND RESPONSIBILITIES.
(a) Sublessee may display and/or erect reasonable signage on the Premises
to protect its use and rights provided herein and for its reasonable
business purposes. All signs must have Sublessor's prior written approval
and must be in accordance with any applicable code.
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(b) Sublessee shall not make any alterations to the Premises without the
prior written consent of Sublessor, which may not be unreasonably withheld.
(c) Section 15.15 of the Master Lease has no application to Sublessee and
sublessor agrees that said section shall only apply to Sublessor and
specifically releases Sublessee from application of said section.
18. ADDITIONAL SUBLESSOR WARRANTIES.
(a) Sublessor agrees that so long as Sublessee fully complies with all of
the terms, covenants and conditions herein contained on sublessee's part to
be kept and performed, Sublessee shall and may peaceably and quietly have,
hold and enjoy the Premises during the sublease term hereof without such
possession being disturbed or interfered with by Sublessor or by any person
claiming by, through or under, Sublessor. Sublessor further covenants and
represents that Sublessor has full right, power and authority to make,
execute and deliver the Sublease.
(b) Sublessor has received no notice, nor to the best of its knowledge
does Sublessor know of any pending or threatened legal actions regarding
its occupancy of the Premises or Master Premises.
(c) Sublessor has received no notice, nor to the best of its knowledge
does Sublessor know of any fire, zoning, health, building code or other
federal, state or local violation of law regarding the Premises or Master
Premises.
(d) Sublessor has no actual knowledge of the existence of Hazardous
Materials (in excess of quantities otherwise permitted under Environmental
Laws) on the Premises or Master Premises. Sublessor warrants the Premises
to be free from any hazardous materials and in compliance with all
environmental laws and regulations. Sublessor further warrants and agrees
to use its best efforts to keep the Master Premises free from the same.
19. OTHER PROVISIONS OF SUBLEASE.
Except as otherwise modified herein, all clearly applicable terms and
conditions of the Master Lease are incorporated into and made a part of
this Sublease as if Sublessor were the lessor thereunder, Sublessee the
lessee thereunder, and the Premises the Master Premises. If any provisions
of this Sublease conflict with provisions of the Master Lease, the
provisions of this Sublease shall govern.
The following terms and conditions of the Master Lease are modified as
follows:
Article 2.2., Option to Renew, deleted in its entirety.
Article 5, Maintenance, Repairs and Alterations; modified as follows:
Replace 5.1(c) with: Sublessor shall be responsible for roof and
structural maintenance; however, Sublessee shall be responsible
for the cost of any
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roof or structural repairs necessitated by the acts of Sublessee,
its employees, agents, customers or invitees. See Section 9(c)
herein.
5.1(f) shall be deleted in its entirety.
Article 5.4., Alterations; delete in its entirety. Replace with:
Sublessee shall not make any alterations to the Premises without
the prior written consent of Sublessor, which may be reasonably
withheld.
Article 10, Assignment and Subletting; replace 10.1, 10.2, 10.3 with
Section 14 of this Sublease.
Article 14, Broker's Fee; replaced by Section 23 of this Sublease.
Article 15.4, Notices; replaced by Section 24 of this Sublease.
20. FIRST RIGHT OF REFUSAL
Sublessor hereby grants Sublessee a first right of refusal on the Master
Premises (excluding the Premises) at the time all or any portion of the
Master Premises is offered for sublease. Sublessor shall give written
notice to Sublessee as to the space availability.
Sublessee shall have ten (10) days from the date of receipt thereof within
which to advise Sublessor, in writing, of its desire to sublease the
additional space, subject to the terms and conditions of this Sublease
Agreement. The space must be taken by Sublessee, if it elects to sublease
the space, coterminous with the balance of the Term and at the then current
rate, subject to the annual CPI increases.
This first right of refusal shall extend with and run with the Master
Premises or any portion thereof. Any failure of Sublessee to exercise the
first right of refusal shall not waive its right to exercise the same as to
any subsequent lease or sublease of all or any portion of the Master
Premises by Sublessor.
As used in this paragraph 20, the word "Sublessor" includes its successors,
assigns, sublessees and tenants. The words "lease", "sublease" or "rental"
include any assignment of interest in all or any portion of the Master
Premises or rights in the same.
21. PRE-POSSESSION INSPECTION.
Prior to taking possession of the Premises the parties shall jointly
conduct an inspection of the same and shall note existing problems, repair
requirements and damages. Excepting those items attributable to normal wear
and tear, a report of the inspection shall be signed and dated by the
parties and attached as Exhibit "C" to this Sublease. In no event shall
Sublessee become responsible for rectifying any problems, making any
repairs or correcting any damages existing at the time that Sublessee took
possession.
22. ATTORNEY'S FEES.
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If Sublessor or Sublessee shall commence an action against the other
arising out of or in connection with this Sublease, the prevailing party
shall be entitled to recover its costs of suit and reasonable attorney's
fees.
23. AGENCY DISCLOSURE.
Sublessor and Sublessee each warrant that they have dealt with no other
real estate broker in connection with this transaction except GATX
Logistics Properties, Inc. and CB Commercial Real Estate Group, Inc. who
represents Sublessor, and consolidated Realty Group who represents
Sublessee. Each party to the Sublease agrees to indemnify, and hold
harmless the other party from claims of any other broker making claims
through that party.
24. NOTICES.
All notices and demands which may or are to he required or permitted to be
given by either party on the other hereunder shall be in writing. All
notices and demands by the Sublessor to Sublessee shall be sent by United
States Mail, postage prepaid, addressed to the Sublessee at the Premises,
and to the address hereinbelow, or to such other places as Sublessee may
from time to time designate in a notice to the Sublessor. All notices and
demands by the Sublessee to Sublessor shall be sent by United States Mail,
postage prepaid, addressed to the Sublessor at the address set forth
herein, and to such other person or place as the Sublessor may from time to
time designate in a notice to the Sublessee.
To Sublessor: Unit Distribution of Utah, Inc. c/o GATX Logistics,
Inc./1301 Gulf Life Drive, Suite 1800, Jacksonville,
Florida 32207 Attn: Real Estate
To sublessee: ProForm Fitness Products, Inc./1500 South 1000 West,
Logan, Utah 84321-0270
Weslo, Inc./1500 South 1000 West, Logan, Utah 84321-0270
25. TIME.
Time is of the essence of this Sublease.
26. REMEDIES.
Each party may have such remedies upon breach of this Sublease as may be
provided by statutory or common law.
27. TRAILER DROP LOT.
Sublessor agrees to make available to Sublessee that unimproved portion of
the site consisting of approximately 4 acres directly north of, and
adjacent to, the paved parking lot adjoining the northerly most section of
the warehouse building, for the purpose of creating a drop lot for its
trailers. Sublessee shall be solely responsible for any and all
-12-
costs associated with the permits, improvements and maintenance expenses
required for their specified use of this site, and must insure that it is
in compliance with all applicable and governing codes and ordinances.
Sublessee may request the use of this area at any time during the term of
Sublease. The rental rate shall be $4,800.00 per acre, per year, and shall
be calculated based upon the actual acreage required by Sublessee.
UNIT DISTRIBUTION OF UTAH, INC.
By: /s/ ILLEGIBLE
-------------------------------------
Title: C.O.O.
----------------------------------
Date: 7-6-94
-----------------------------------
SUBLESSOR
PROFORM FITNESS PRODUCTS, INC.
By: /s/ S. Fred Beck
-------------------------------------
Title: CFO
----------------------------------
Date: 7/5/94
-----------------------------------
WESLO, INC.
By: /s/ S. Fred Beck
-------------------------------------
Title: CFO
----------------------------------
Date: 7/5/94
-----------------------------------
SUBLESSEE
-13-
FIRST AMENDMENT TO SUBLEASE
1. Identification and Parties.
This First Amendment to Sublease (this "Amendment") is made and entered
into this 31st day of July, 1994, by and between UNIT DISTRIBUTION OF UTAH,
INC., a Utah Corporation ("Sublessor") and PROFORM FITNESS PRODUCTS, INC. and
WESLO, INC., both Utah Corporations (collectively "Sublessee").
2. Recitals.
2.1. On or about July 6, 1994, Sublessor and Sublessee entered into that
certain sublease whereby Sublessor subleased to Sublessee approximately 325,325
square foot of warehouse space and 3,750 square foot of office space contained
within the 615,000 square foot warehouse building located at 1051 South
Industrial Parkway in Clearfield, Utah.
2.2. It is the desire of the parties to amend the Sublease to change the
amount of the minimum rent due for each full month during the initial 12-month
period of the Sublease. The defined terms used herein shall have the same
meaning assigned to them in the Sublease unless a definition appears herein.
3. Amendment.
3.1. The minimum rent figure shown in Section 7.1, "Minimum Rent", of the
Sublease shall be changed from $65,065.00 to SIXTY FIVE THOUSAND EIGHT HUNDRED
FIFTEEN AND N0/100 DOLLARS ($65,815.00).
3.1. Except as expressly modified herein, all of the terms and conditions
of the Sublease, as amended, shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this instrument on the year
and date first above written.
"SUBLESSOR" "SUBLESSEE"
UNIT DISTRIBUTION OF UTAH, INC., A PROFORM FITNESS PRODUCTS, INC., a
Utah Corporation Utah Corporation
By: /s/ ILLEGIBLE By: /s/ S. Fred Beck
------------------------------- ------------------------------
Title: Chief Financial Officer Title: CFO
---------------------------- ---------------------------
Date: 8/22/94 Date: 8/22/94
----------------------------- ----------------------------
SECOND AMENDMENT TO SUBLEASE
1. Identification and Parties.
This Second Amendment to Sublease (this "Amendment") is made and entered
into this 28th day of April, 1995, by and between UNIT DISTRIBUTION OF UTAH,
INC., a Utah Corporation ("Sublessor") and ICON HEALTH AND FITNESS,INC.,
formerly known as PRO-FORM FITNESS, INC. and WESLO, INC., both Utah Corporations
(collectively, "Sublessee").
2. Recitals.
2.1 On or about July 6, 1994, Sublessor and Sublessee entered into that
certain Sublease whereby Sublessor subleased to Sublessee approximately 325,325
square feet of warehouse space and 3,750 square feet of office space contained
within the 615,000 square foot warehouse building located at 1051 South
Industrial Parkway in Clearfield, Utah.
2.2 On or about July 31, 1994, said Sublease was amended by the First
Amendment to Sublease whereby the minimum rent due for each full month during
the initial 12-month period was increased to $65,815.00.
2.3 It is the desire of the parties to now further amend the Sublease to
reflect an increase in the amount of Subleased warehouse space and minimum
monthly rend as follows:
3. Amendment
3.1 The warehouse square footage figure shown in Section 3. "Premises" of
the Sublease shall be changed from 325,325 square feet to 328,650 square feet.
3.2 The minimum rent figure shown in Section 7.1 "Minimum Rent" of the
Sublease, and which was changed pursuant to the First Amendment to Sublease,
shall be increased from $65,815.00 to Sixty-six Thousand Four Hundred Eighty and
00/00 Dollars ($66,480.00).
3.3 Both of the Changes set forth in 3.1 and 3.2 above shall be deemed to
have taken effect as of January 1, 1995.
3.4 Except as expressly modified herein, all of the terms and conditions
of the Sublease, as amended, shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this instrument on the year
and date first written above.
"SUBLESSOR" "SUBLESSEE"
UNIT DISTRIBUTION OF UTAH, INC., A PROFORM FITNESS PRODUCTS, INC., a
Utah Corporation Utah Corporation
By: /s/ ILLEGIBLE By: /s/ S. Fred Beck
---------------------------------- ----------------------------------
Title: CFO Title: CFO
------------------------------- -------------------------------
Date: 4/28/95 Date: 4/18/95
-------------------------------- --------------------------------
-2-
THIRD AMENDMENT TO SUBLEASE
The Third Amendment to Sublease made this ____ day of________________,
1996, by and between UNIT DISTRIBUTION OF UTAH, INC., a Utah corporation
("Sublessor") and ICON HEALTH AND FITNESS, INC., formerly know as PRO-FORM
FITNESS, INC., and WESLO, INC., both Utah corporations (collectively,
"Sublessee").
RECITALS
A. Sublessor and Sublessee entered into that certain Sublease dated
July 6, 1994, for approximately 325,325 square feet of warehouse space and
approximately 3,750 feet of office space in the Building consisting of
approximately 615,000 square feet located at 1051 South Industrial Parkway,
Clearfield, Weber County, Utah, together with the exclusive use of a portion of
the parking facilities adjacent to the north end of the Building and other
parking facilities and amenities as set forth therein.
B. The Sublease was amended by First Amendment to Sublease dated July
31, 1994 (the First Amendment"), and the Second Amendment to Sublease dated
April 28, 1995 (the "Second Amendment"), to increase the minimum rent required
by Section 7.1 of the Sublease for the initial 12 month period of the Sublease
to $66,480.00 and to enlarge the square footage of subleased warehouse space
from 325,325 square feet to 328,650 square feet of warehouse space so that the
total square footage of warehouse and office space leased to Sublessee under the
Sublease is 332,400 square feet.
The Sublease described in paragraph A above, as amended by the First
Amendment and the Second Amendment, shall hereinafter be referred to as the
"Sublease."
C. Sublessor and Sublessee desire to amend the Sublease on the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the covenants and promises
hereinafter set forth, and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties agree as follows:
1. The Sublease is hereby amended to enlarge the Premises to include
the additional 282,600 square feet of space in the Building located at 1051
South Industrial Parkway, Clearfield, Weber County, Utah, which was not
heretofore included in the Premises, together with the exclusive right to use
all of the parking facilities and amenities now serving the Building
as identified on the Site Plan attached hereto as Exhibit "A." (the "Additional
Space") As of the date of this Third Amendment, the portion of the Building not
occupied by Sublessee is being used by Sublessor, but will be turned over
incrementally to Sublessee in broom clean condition on the schedule set forth on
Exhibit "B" attached hereto. Each incremental portion of the 282,600 square feet
shall become a part of the Premises on the date upon which possession is
delivered to Sublessee, and the term of the Sublease with respect to such
Additional Space shall end on December 31, 2003, unless sooner terminated or
further extended as provided herein.
2. Sublessee hereby exercises its option pursuant to Paragraph
5 of the Sublease to extend the term of the Sublease as amended for an
additional term commencing on July 1, 1999, and ending on December 31, 2003.
3. Rent shall continue to be paid on the 332,400 square feet of
warehouse and office space leased by Sublessee under the Sublease prior to this
Third Amendment, at the minimum rent rate as set forth in paragraph 7.1 of the
Sublease as amended by the First Amendment and the Second Amendment, subject to
annual adjustment as set forth in the Sublease. With respect to the additional
282,600 square feet of Additional Space, commencing on May 1, 1996, Sublessee
shall pay to Sublessor as a minimum rent for such Additional Space, without
deduction or right of set off and without notice or demand, at the initial rate
of $3.15 per square foot per annum, payable in equal monthly installments, in
advance on the first date of each month during the term of the Sublease as
amended hereby (except as otherwise provided in Exhibit "B" attached hereto).
During the term of this Sublease, the minimum rent for the Additional Space
shall be increased annually commencing on June 1, 1997, and continuing on June 1
of each successive year thereafter through the term of the Sublease as amended
hereby, by the percentage increase in the CPI for the twelve (12) month period
immediately preceding said adjustment date. However, notwithstanding the
foregoing, in no event shall the minimum rent for the Additional Space during
the term of this Sublease increase on any adjustment date by more than three
percent (3%) of the minimum rent payable immediately prior to such adjustment
date, with each installment of rent due under this Sublease. With each
installment of rent or additional rent due under the Sublease, Sublessee shall
pay to Sublessor all sales tax due upon such rental payment.
-2-
4. Notwithstanding anything to the contrary set forth in paragraph 10
of the Sublease, Sublessor shall retain throughout the remainder of the term of
the Sublease, as amended hereby, the $65,065.00 paid to Sublessor upon
commencement of the term of the Sublease as security for Sublessee's performance
of its obligations under the Sublease.
5. Paragraph 7.2 of the Sublease is hereby amended to delete ".5351
percent (53.51%)" as set forth in line 2 thereof and to substitute "100%" in its
place.
6. Paragraph 7.3 of the Sublease is hereby amended to delete ".5351
percent (53.51%)" in line 10 thereof and substitute "100%" in its place.
7. Paragraph 16(d) of the Sublease is hereby amended to delete "53.51%"
as set forth in line 5 thereof and to substitute "100%" in its place.
8. Paragraph 3 of the Sublease is hereby amended to delete "54.20%" as
set forth in line 22 thereof and to substitute "100%" in its place.
9. Sublessee at its own expense, shall maintain in good condition and
repair all portions of the parking area subject to exclusive use by Sublessee as
shown on Exhibit "A" attached hereto, including 100% of the cost of the drive
lanes on the Master Premises described in paragraph 9(d) of the Sublease.
10. Sublessee shall pay for all gas, electrical and other utilities
furnished to the Premises. Effective upon June 1, 1996, Sublessee shall obtain
all required utility services through accounts in its own name directly with the
utility providers.
11. Provided (i) that Sublessee is not in default under the terms of
the Sublease, (ii) that Sublessee has fully performed all of its obligations
stated herein, and (iii) that the Master Lease is then in full force and effect,
Sublessee shall have the option to extend the term of the Sublease as amended
hereby, on the entire 615,000 square feet of the Premises for an additional
three (3) year term commencing on January 1, 2004, and terminating on December
31, 2006, by giving written notice to Sublessor not later than January 1, 2003.
Such extension shall be on the same terms and conditions as set forth herein
except that minimum rent for the entire 615,000 square feet of the Premises for
the first year of such extended term shall be the same minimum rent as was in
effect for the Additional Space as of December 31, 2003. The minimum rent on the
Premises shall be increased annually on January 1, 2005, and January 1, 2006, by
the percentage increase in the CPI for the twelve (12) month period immediately
preceding said
-3-
adjustment date. However, notwithstanding the foregoing, in no event shall the
minimum rent during such extended term increase on any adjustment date by more
than five percent (5%) of the minimum rent payable immediately prior to such
adjustment date.
12. The Sublease is hereby amended to delete paragraph 27 thereof.
13. Sublessee acknowledges that the Master Landlord is responsible to
coordinate the maintenance and repairs of the access road to the Building in
which the Premises are located. Sublessor will use its best efforts to assist
Sublessee in a non-monetary manner in addressing any maintenance or repair
issues relating to the road with the Master Landlord.
14. Any terms of the Sublease not inconsistent with this Third
Amendment are hereby ratified and confirmed and shall continue in full force and
effect.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the day and year first above written.
Signed, sealed and delivered UNIT DISTRIBUTION OF UTAH, INC.,
in the presence of:
__________________________________ By:______________________________________
Print: ___________________________ Print:______________________________
Its: ___________________ President
__________________________________
Print: ___________________________ (Corporate Seal)
ICON HEALTH AND FITNESS, INC.
__________________________________ By:______________________________________
Print: ___________________________ Print:______________________________
Its: ___________________ President
__________________________________
Print: ___________________________ (Corporate Seal)
-4-
EXHIBIT "B"
The Premises shall be incrementally enlarged by the addition to the Premises of
282,600 square feet of additional space on the following schedule:
1. Possession of an additional area consisting of approximately 100,000
square feet of space shall be delivered by Sublessor to Sublessee
between April 15, 1996 and April 30, 1996. Rent shall commence to be
paid on such additional space in advance on May 1, 1996, and continue
to be paid on the first day of each consecutive month thereafter
throughout the term of the Sublease.
2. Possession of an additional area consisting of approximately 112,600
square feet of space shall be delivered by Sublessor to Sublessee
between May 1, 1996, and May 15, 1996. Rent shall commence to be paid
on such additional space on May 15, 1996. Rent for the period from May
15, 1996, through May 31, 1996, shall be paid in arrears on June 1,
19096. All other rent for such additional space shall be paid monthly
in advance commencing on June 1, 1996, and continue to be paid on the
first day of each month thereafter throughout the term of this
Sublease.
3. Possession of the remaining area consisting of approximately 60,000
square feet of warehouse and office space shall be delivered by
Sublessor to Sublessee on or before August 1, 1996. Rent shall be
payable on such additional area in advance commencing on August 1,
1996, and continuing on the first day of each month thereafter
throughout the term of this Sublease.
All space delivered by Sublessor to Sublessee under clauses 1., 2., and 3. above
shall be contiguous to warehouse or office space already in Sublessee's
possession.
Notwithstanding anything to the contrary set forth in paragraphs 5, 6, 7, 8 or 9
of the Third Amendment, until such time as Sublessee is in possession of the
entire 615,000 square feet of the Premises, Sublessee shall be required to pay
only a pro rata share of the costs required by paragraphs 7.2, 7.3, 16(d), 3 of
Sublease to be paid by Sublessee and a prorata share of the cost of maintenance
of the parking area, equal to a fraction the numerator of which is the number of
square feet of the Premises then in Sublessee's possession and the denominator
of which is 615,000.
-5-
ADDENDUM "A"
ICON SUBLEASE CPI INCREASE AND RENTAL ADJUSTMENT
Increase @ 1.6843% - New rent $73,223.15 beginning Jue 1998
Months Adj. Monthly/Yearly Rent Monthly/Yearly Rent Paid Balance Due
- ------ ------------------------ ------------------------ -----------
June 1998 thru
May 1999 $73,223.15 - $878,677.80 $72,010.28 - $864,123.36 $14,554.44
----------
Increase @ 1.9632% - New rent $74,660.67 beginning June 99
Month Adjusted Monthly Rent Monthly Rent Paid Balance Due
- ----- --------------------- ----------------- -----------
June 1999 $74,660.67 72,010.28 $2,650.39
---------
Monthly rental for the extension term from September 1, 1999 through December
31, 1999, $76,900.49 (including the 1999 CPI increase).
Month Adjusted Monthly Rent Monthly Paid Balance Due
- ----- --------------------- ------------ -----------
September $76,900.49 $72,010.28 $4,890.21.
----------
Total Due GATX Logistics, Inc.:
$14.554/44 June 1998-May 1999
$ 2,650.39 June 1999
--------------------
Total $17,204.83 for recapture of 1998/1999 CPI increase
$ 4,890.21 underpaid from September
----------
$22,095.04 Total Due
-6-
FIFTH AMENDMENT TO SUBLEASE
This FIFTH AMENDMENT TO SUBLEASE (the "Amendment") is entered into as of
this 9/th/ day of September, 1999 by and between GATX LOGISTICS, INC., a Florida
corporation ("Sublessor"), and ICON HEALTH AND FITNESS, INC., a Utah corporation
(formerly known as Proform Fitness Products, Inc. and Weslo, Inc.)
("Sublessee").
Recitals
A. Pursuant to that certain Sublease dated July 6, 1994, as amended on
July 31, 1994, April 28, 1995, August 27, 1996 and June 28, 1999 (collectively,
the "Sublease") by and between Sublessor's predecessor-in-interest (Unit
Distribution of Utah, Inc.) and Sublessee (or its predecessor-in-interest),
Sublessee subleased certain premises consisting of approximately 332,400
rentable square feet comprised of approximately 328,650 rentable square feet of
warehouse space and approximately 3,750 square feet of office space in a
building commonly known as 1051 South Industrial Parkway, Clearfield, Weber
County, Utah (the "Subleased Premises").
B. Sublessor and Sublessee desire to amend the Sublease to, among other
things, extend the term of the Sublease, all in accordance with the terms and
conditions set forth below.
C. All capitalized terms used herein not specifically defined shall have
the meanings ascribed to such terms in the Sublease. The term "Sublease" where
used in the Sublease shall hereinafter refer to the Sublease as amended by this
Amendment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Sublessor and Sublessee hereby
agree as follows:
1. Extension of Term. The term of the Sublease is hereby extended for a
period of four (4) months from September 1, 1999 through December 31, 1999 (such
period from September 1, 1999 through December 31, 1999 shall be referred to
herein as the "Extension Term"). Sublessee agrees to vacate and surrender the
Subleased Premises to Sublessor in good condition and repair on or before
December 31, 1999.
2. Minimum Rent. The minimum rent payable by Sublessee to Sublessor for
the Extension Term shall be Seventy Six Thousand Nine Hundred and 49/100
($76,900.49) per month. Concurrently with the execution of this Amendment,
Tenant shall pay the foregoing sum for the minimum rent payable for the month of
September, 1999. Additionally, Sublessee shall
pay to Sublessor Sublessee's proportionate share of taxes, insurance costs and
operating costs within five (5) days of Sublessor's demand therefor.
3. Past Due Rent: Holdover: Effectiveness of this Amendment.
Notwithstanding anything to the contrary contained in the Sublease or this
Amendment, Sublessee hereby acknowledges and agrees that it has not made various
payments of rent that were payable to Sublessor and are now past due in the
aggregate sum of Twenty Two Thousand Ninety-Five and 04/100 Dollars ($22,095.04)
(the "Past Due Amount"), and Sublessee hereby agrees that it shall pay the
entire Past Due Amount, in addition to all other rental payable hereunder as set
forth in Section 2 above, on or before September 15, 1999 (the "Outside Date").
Sublessee further agrees that notwithstanding anything to the contrary contained
in the Sublease or herein, if Sublessee fails to pay the Past Due Amount to
Sublessor in immediately available funds on or before the Outside Date, then, at
Sublessor's sole election, the extension of the term set forth in Section 1
shall be null and void and of no force or effect and Sublessee shall be
considered to have a subtenancy at sufferance which may be terminable by
Sublessor at any time in its sole discretion subject to all the terms contained
in the Sublease, except that the minimum rent payable hereunder shall be equal
to 200% of the last applicable monthly minimum rent, which shall not be prorated
for any partial month. Acceptance of such rent shall not constitute a waiver by
Sublessor of any re-entry or any rights of Sublessor nor shall it be deemed an
extension or renewal of the Sublease term without a written election thereof by
Sublessor. In addition, Sublessee shall be liable for all damages incurred by
Sublessor as a result of such holdover.
4. Sublessee's Acceptance of the Premises "As Is". Sublessee acknowledges
that it has previously been occupying the Subleased Premises under the Sublease,
and Sublessee agrees to continue to accept the Subleased Premises in its
presently existing "as is" condition, without representation or warranty by
Sublessor whatsoever.
5. Attorney's Fees. In the event either party shall commence an action to
enforce any provision of this Amendment, the prevailing party in such action
shall be entitled to receive from the other party, in addition to damages,
equitable or other relief, and all costs and expenses incurred, including
reasonable attorneys fees and court costs and fees incurred to enforce any
judgement obtained.
6. Severability. This provision with respect to attorneys fees incurred
to enforce a judgement shall be severable from all other provisions of this
Amendment, shall survive any judgement, and shall not be deemed merged into the
judgement.
7. Authority. Sublessee has full power and authority to enter this
Amendment and the person signing on behalf of Sublessee has been fully
authorized to do so by all necessary corporate action on the part of Sublessee.
8. Estoppel. Sublessee warrants, represents and certifies to Sublessor
that as
of the date of this Amendment: (a) Sublessor is not in default under the
Sublease; and (b) Sublessee does not have any defenses or offsets to payment of
rent and performance of its obligations under the Sublease as when same becomes
due.
9. Sublease in Full Force. Except for those provisions which are
inconsistent with this Amendment, all other terms, covenants and conditions of
the Sublease shall remain unmodified and in full force and effect.
IN WITNESS WHEREOF, this Amendment is executed as of the date first written
above.
Sublessor Sublessee:
GATX LOGISTICS, INC. ICON HEALTH AND FITNESS, INC. a
Utah Corporation
By: /s/ Michael J. Gardner By: /s/ Kent S. Lundgreen
-------------------------------- -----------------------------
Name: Michael J. Gardner Name: Kent S. Lundgreen
-------------------------- ----------------------
Title: Executive V.P. and C.O.O Title: Materials Manager
------------------------ ----------------------
Date: September 17, 1999
------------------------
SIXTH AMENDMENT TO SUBLEASE
This SIXTH AMENDMENT TO SUBLEASE (the "Amendment") is entered into as of
this 1/st/ Day of December, 1999 by and between GATX LOGISTICS, INC., a Florida
corporation ("Sublessor"), and ICON HEALTH AND FITNESS, INC., a Utah corporation
(formerly known as Proform Fitness Products, Inc. and Weslo, Inc.)
("Sublessee").
Recitals
A. Pursuant to that certain Sublease dated July 6, 1994, as amended on
July 31, 1994, April 28, 1995, August 27, 1996, June 28, 1999 and September 9,
1999 (collectively, the "Sublease") by and between Sublessor's
predecessor-in-interest (Unit Distribution of Utah, Inc.) and Sublessee (or its
predecessor-in-interest), Sublessee subleased certain premises consisting of
approximately 332,400 rentable square feet comprised of approximately 328,650
rentable square feet of warehouse space and approximately 3,750 square feet of
office space in a building commonly known as 1051 South Industrial Parkway,
Clearfield, Weber County, Utah (the "Subleased Premises").
B. Sublessor and Sublessee desire to amend the Sublease to, among other
things, extend the term of the Sublease, all in accordance with the terms and
conditions set forth below.
C. All capitalized terms used herein not specifically defined shall have
the meanings ascribed to such terms in the Sublease. The term "Sublease" where
used in the Sublease shall hereinafter refer to the Sublease as amended by this
Amendment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Sublessor and Sublessee hereby
agree as follows:
1. Extension of Term. The term of the Sublease is hereby extended for a
period of three (3) months from January 1, 2000 through March 31, 2000 (such
period from January 1, 2000 through March 31, 2000 shall be referred to herein
as the "Extension Term"). Sublease agrees to vacate and surrender the Subleased
Premises to Sublessor in good condition and repair on or before March 31, 2000.
2. Minimum Rent. The minimum rent payable by Sublessee to Sublessor for
the Extension Term shall be Seventy Six Thousand Nine Hundred and 49/100 Dollars
($76,900.49) per month. Additionally, Sublessee shall pay to Sublessor
Sublessee's demand therefor.
3. Sublease's Acceptance of the Premises "As Is". Sublessee acknowledges
that it has previously been occupying the Subleased Premises under the Sublease,
and Sublessee agrees to continue to accept the Subleased Premises in its
presently existing "as is" condition without representation or warranty by
Sublessor whatsoever.
4. Attorney's Fees. In the event either party shall commence an action to
enforce any provision of this Amendment, the prevailing party is such action
shall be entitled to receive from the other party, in addition to damages,
equitable or other relief, and all costs and expenses incurred, including
reasonable attorneys fees and court costs and fees incurred to enforce any
judgement obtained.
5. Severability. This provision with respect to attorneys fees incurred
to enforce a judgement shall be severable from all other provisions of this
Amendment, shall survive any judgement, and shall not be deemed merged into the
judgement.
6. Authority. Sublessee has full power and authority to enter into this
Amendment and the person signing on behalf of Sublessee has bee fully authorized
to do so by all necessary corporate action on the part of Sublessee.
7. Estoppel. Sublessee warrants, represents and certifies to Sublessor
that as of the date of this Amendment: (a) Sublessor is not in default under the
Sublease; and (b) Sublessee does not have any defenses or offsets to payment of
rent and performance of its obligations under the Sublease as and when same
becomes due.
8. Sublease in Full Force. Except for those provisions which are
inconsistent with this Amendment, all other terms, covenants and conditions of
the Sublease shall remain unmodified and in full force and effect.
IN WITNESS WHEROF, this Amendment is executed as of the date first written
above.
Sublessor Sublessee:
GATX LOGISTICS, INC. ICON HEALTH AND FITNESS, INC. a
Utah Corporation
By: /s/ Michael J. Gardner By: /s/ Kent S. Lundgreen
-------------------------------- -----------------------------
Name: Michael J. Gardner Name: Kent S. Lundgreen
-------------------------- ----------------------
Title: Executive V.P. and C.O.O Title: Materials Manager
------------------------ ----------------------
Date: December 13, 1999
------------------------
SEVENTH AMENDMENT TO SUBLEASE
This SEVENTH AMENDMENT TO SUBLEASE (the "Amendment") is entered into as of
this 31st day of March, 2000 by and between GATX LOGISTICS, INC., a Florida
corporation ("Sublessor"), and ICON HEALTH AND FITNESS, INC., a Utah corporation
(formerly known as Proform Fitness Products, Inc. and Weslo, Inc.)
("Sublessee").
Recitals
A. Pursuant to that certain Sublease dated July 6, 1994, as amended on
July 31, 1994, April 28, 1995, August 27, 1996, June 28, 1999, September 9, 1999
and December 1, 1999 (collectively, the "Sublease") by and between Sublessor's
predecessor-in-interest (Unit Distribution of Utah, Inc.) and Sublessee (or its
predecessor-in-interest), Sublessee subleased certain premises consisting of
approximately 332,400 rentable square feet comprised of approximately 328,650
rentable square feet of warehouse space and approximately 3,750 square feet of
office space, as forth on the attached Exhibit "A", in building commonly known
as 1051 South Industrial Parkway, Clearfield, Weber County, Utah (the "Subleased
Premises").
B. Sublessor and Sublessee desire to amend the Sublease to, among other
things, extend the term of the Sublease, all in accordance with the terms and
conditions set forth below.
C. All capitalized terms used herein not specifically defined shall have
the meanings ascribed to such terms in the Sublease. The term "Sublease" where
used in the Sublease shall hereinafter refer to the Sublease as amended by this
Amendment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Sublessor and Sublessee hereby
agree as follows:
1. Extension of Term. The term of the Sublease is hereby extended for a
period commencing April 1, 2000 through March 31, 2001 (such period from April
1, 2000 through March 31, 2001 shall be referred to herein as the "Extension
Term"). Sublessee agrees to vacate and surrender the Subleased Premises to
Sublessor in good condition and repair and in accordance with the terms of the
Sublease, on or before March 31, 2001.
2. Minimum Rent. The minimum rent payable by Sublessee to Sublessor for
the Extension Term shall be Seventy-Six Thousand Nine Hundred and 49/100 Dollars
($76,900.49) per month. In accordance with the terms of the Master Lease,
Section 7.1 Minimum Rent, the Minimum Rent stated herein shall be subject to a
CPI increase as set forth in the section referenced above. Additionally,
Sublessee shall pay to Sublessor Sublease's proportionate share of property
taxes, insurance costs and operating costs within five (5) days of Sublessor's
demand therfor.
3. Expansion Space: Provided that Sublessee is not then in default of the
Sublease and subject to space availability and Sublessor's sole discretion,
Sublessor shall offer to Sublessee any additional vacant space contained within
the remainder of the building in which
the "Subleased Premises" are a part, under the same terms and conditions as set
forth within the Sublease. Sublessor shall notify Sublessee in writing of the
availability of such expansion space and Sublessee shall have five (5) days
following receipt of notice to, in writing, accept or reject the offered space.
4. Sublessee's Acceptance of the Premises "As Is". Sublessee acknowledges
that it has previously been occupying the Subleased Premises under the Sublease,
and Sublessee agrees to continue to accept the Subleased Premises in its
presently existing "as is" condition, without representation or warranty by
Sublessor whatsoever.
5. Attorney's Fees. In the event either party shall commence an action to
enforce any provision of this Amendment, the prevailing party in such action
shall be entitled to receive from the other party, in addition to damages,
equitable or other relief, and all costs and expenses incurred, including
reasonable attorneys fees and court costs and fees incurred to enforce any
judgement obtained.
6. Severability. This provision with respect to attorneys fees incurred to
enforce a judgement shall be severable from all other provisions of this
Amendment, shall survive any judgement, and shall not be deemed merged into the
judgement.
7. Authority. Sublessee has full power and authority to enter into this
Amendment and the person signing on behalf of Sublessee has been fully
authorized to do so by all necessary corporated action on the part of Sublessee.
8. Estoppel. Sublessee warrants, represents and certifies to Sublessor that
as of Sublease; and (b) Sublessee does not have any defenses or offsets to
payment of rent and performance of its obligations under the Sublease as and
when the date of this Amendment: (a) Sublessor is not in default under the same
becomes due.
9. Sublease in Full Force. Except for those provisions which are
inconsistent with this Amendment, all other terms, covenants and conditions of
the Sublease shall remain unmodified and in full force and effect.
IN WITNESS WHEROF, this Amendment is executed as of the date first written
above.
Sublessor Sublessee:
GATX LOGISTICS, INC. ICON HEALTH AND FITNESS, INC. a
Utah Corporation
By: /s/ ILLEGIBLE By: /s/ Jon M. White
-------------------------------- -----------------------------
Name: [ILLEGIBLE] Name: Jon M. White
-------------------------- ----------------------
Title: [ILLEGIBLE] Title: SR. V.P. of Mfg.
------------------------ ----------------------
Date: [ILLEGIBLE]
------------------------
EIGHTH AMENDMENT TO SUBLEASE
This EIGHTH AMENDMENT TO SUBLEASE (the "Amendment") is entered into as of
the 1/st/ day of April, 2001 by and between APL LOGISTICS WAREHOUSE MANAGEMENT
SERVICES, INC., a Florida corporation, fka GATX Logistics, Inc. ("Sublessor"),
and ICON HEALTH AND FITNESS, INC., a Utah corporation (fka Proform Fitness
Products, Inc. and Welso, Inc.) ("Sublessee").
Recitals
A. Pursuant to that certain Sublease dated July 6, 1994 (the "Original
Sublease"), as amended on July 31, 1994, April 28, 1995, August 27, 1996, June
28, 1999, September 9, 1999, December 1, 1999 and March 31, 2000 (collectively,
the "Sublease") by and between Sublessor's predecessor-in-interest (Unit
Distribution of Utah, Inc.) and Sublessee (or its predecessor-in-interest),
Sublessee subleases from Sublessor certain premises consisting of approximately
332,400 rentable square feet comprised of approximately 328,650 rentable square
feet of warehouse space and approximately 3,750 rentable square feet of office
space in a building commonly known as 1051 South Industrial Parkway, Clearfield,
Weber County, Utah, as depicted on Exhibit "A" attached hereto (the "Subleased
Premises", or "Premises"). The Sublease is subject and subordinate to the master
lease relating to the Subleased Premises under which Sublessor is the prime
lessee (as the same may be amended and supplemented, the "Master Lease").
B. Sublessor and Sublessee desire to amend the Sublease to, among other
things, (I) extend the term of the Sublease, and (ii) add to the Subleased
Premises, on an incremental basis, the remainder of the Master Premises (defined
in Section 2 of the Original Sublease and containing a total of 615,000 rentable
square feet, which square footage includes 15,000 square feet of office space),
which remainder contains an additional 282,600 rentable square feet contiguous
to the Subleased Premises, all in accordance with the terms and conditions set
forth below.
C. All capitalized terms used herein not specifically defined shall have
the meanings ascribed to such terms in the Sublease. The term "Sublease" where
used in the Sublease shall hereafter refer to the Sublease as amended by this
Amendment.
Agreement
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Sublessor and Sublessee hereby
agree as follows:
1. Extension of Term. The term of the Sublease is hereby extended for a
period of thirty-three (33) months, from April 1, 2001 (the "Renewal
Commencement Date") through December 31, 2003 (the "Expiration Date"). Sublessee
agrees to vacate and surrender the Subleased Premises (including the Must Take
Space, as defined blow) to Sublessor in good condition and repair on or before
the Expiration Date and otherwise in accordance with the terms of the Sublease.
The period commencing on the Renewal Commencement Date and ending on the
Expiration Date is referred to herein as the "Extended Term".
2. Must-Take Space. Sublessee hereby agrees to (a) add to the Subleased
Premises, on the date that is thirty (30) days after the date of the mutual
execution of this Amendment, approximately 50,000 additional rentable square
feet of ware house space contiguous to the original Subleased Premises, as such
space is designated by Sublessor (the "First Must Take Space"); (b) add to the
Subleased Premises, on the date that is sixty (60) days after the date of the
mutual execution of this Amendment, approximately 50,000 additional rentable
square feet of warehouse space contiguous to the First Must Take Space, as such
space is designated by Sublessor (the "Second Must Take Space"); and (c) add to
the Subleased Premises, on the date that is six (6) months after the date of the
mutual execution of this Amendment, the remainder of the Master Premises,
containing approximately 182,600 additional rentable square feet of warehouse
space contiguous to the Second Must Take Space (the "Third Must Take Space), as
such space is designated by Sublessor. The square footages of the First Must
Take Space, Second Must Take Space and Third Must Take Space set forth in this
Section 2 are hereby stipulated by Sublessor and Sublessee to be true and
correct. The effective date of Sublessee's lease of the First Must Take Space
shall be the date that is thirty (30) days after the date of the mutual
execution of this Amendment (the "First Must Take Commencement Date), the
effective date of Sublessee's lease of the Second Must Take Space shall be the
date that is sixty (60) days after the date of the mutual execution of this
Amendment (the "Second Must Take Commencement Date") and the effective date of
Sublessee's lease of the Third Must Take Space shall be the date that is six (6)
months after the date of the mutual execution of this Amendment (the "Third Must
Take Commencement Date"). Sublessee's lease of the First Must Take Space, Second
Must Take Space and Third Must Take Space shall be on the same terms and
conditions as affect the original Subleased Premises; provided, however, that
(A) Sublessee's proportionate share of taxes, insurance, Operating Costs, and
all other items for which Sublessee is responsible for its proportionate share
under the Sublease shall be increased to take into account the additional number
of rentable square feet of the First Must Take Space, Second Must Take Space and
Third Must Take Space, as further set forth in Section 4 below, and (ii) the
First Must Take Space, Second Must Take Space and Third Must Take Space shall be
leased to Sublessee in their then current condition, subject to the improvements
to be constructed pursuant to Section 6 below, without any representations or
warranties. The term of Sublessee's lease for the First Must Take Space, Second
Must Take Space and Third Must Take Space, and Sublessee's obligation to pay
rent and all other charges with respect to the First Must Take Space, Second
Must Take Space and Third Must Take Space shall commence upon the First Must
Take Commencement Date, Second Must Take Commencement Date and Third Must Take
Commencement Date respectively, and shall expire on the "Expiration Date".
Sublessor shall not be liable to Sublessee or otherwise be in default hereunder
in the event that Sublessor is unable to deliver the First Must Take Space,
Second Must Take Space or Third Must Take Space
to Sublessee on the projected delivery date thereof, and in the event Sublessor
is unable to deliver the First Must Take Space, Second Must Take Space, or Third
Must Take Space as applicable, on the projected date, then the First Must Take
Commencement Date, Second Must Take Commencement Date and Third Must Take
Commencement Date, as applicable, shall be the date that Sublessor delivers the
First Must Take Space, Second Must Take Space or Third Must Take Space, as
applicable, to Sublessee. Within ten (10) days after Sublessor's written
request, if any, Sublessee shall execute a commencement date memorandum with
respect to the Sublease, on Sublessor's then standard form (which forms hall be
reasonably satisfactory to Sublessee), adding the First Must Take Space to the
Subleased Premises upon the terms and conditions set forth in this Section 2;
failure by Sublessee to timely execute such memorandum shall constitute a
default under the Sublease. Within then (10) days after Sublessor's written
request, if any, Sublessee shall execute a commencement date memorandum with
respect to the Sublease, on Sublessor's then standard form (which form shall be
reasonably satisfactory to Sublessee), adding to the Second Must Take Space to
the Subleased Premises upon the terms and conditions set forth in this Section
2; failure by Sublessee to timely execute such memorandum shall constitute a
default under the Sublease. Within ten (10) days after Sublessor's written
request, if any, Sublessee shall execute a commencement date memorandum with
respect to the Sublease, on Sublessor's then standard form (which form shall be
reasonably satisfactory to Sublessee), adding the Second Must Take Space to the
Subleased Premises upon the terms and conditions set forth in this Section 2;
failure by Sublessee to timely execute such memorandum shall constitute a
default under the Sublease. Within ten (10) days after Sublessor's written
request, if any, Sublessee shall execute a commencement date memorandum with
respect to the Sublease, on Sublessor's then standard form (which form shall be
reasonably satisfactory to Sublessee), adding the Third Must Take Space to the
Subleased Premises upon the terms and conditions set forth in this Section 2;
failure by Sublessee to timely execute such memorandum shall constitute a
default under the Sublease. The First Must Take Space, Second Must Take Space
and Third Must Take Space are referred to collectively herein as the "Must Take
Space". Notwithstanding that memorandums may not be executed in connection with
the addition of the Must Take Space to the Subleased Premises, the First Must
Take Space, Second Must Take Space and Third Must Take Space shall be deemed
part of the "Subleased Premises" and "Premises" under the Sublease on the First
Must Take Commencement Date, Second Must Take Commencement Date and Third Must
Take Commencement Date, as applicable, upon and subject to the terms and
conditions of this Amendment.
3. Minimum Rent. (a) Commencing on the Renewal Commencement Date, the
minimum rent payable by Sublessee to Sublessor for the Subleased Premises shall
equal Seventy-Nine Thousand Seven Hundred Seventy-Six and 00/100 Dollars
($79,776.00) per month (i.e., $0.24 per rentable square foot per month).
Additionally, Sublessee shall continue to be required to pay to Sublessor
Sublessee's proportionate share (as such proportionate share is modified in
Section 4 below) of taxes, insurance costs and Operating Costs within five (5)
days of Sublessor's demand therefor, as further set forth in the Sublease.
(b) Commencing on the First Must Take Commencement Date, the minimum
rent for the Subleased Premises shall be increased by an amount equal to Twelve
Thousand and 00/100 Dollars ($12,000.00) per month (i.e., the square footage of
the First Must Take Space, 50,000,
multiplied by $0.24 per rentable square foot per month) (in addition to the
minimum rent for the original Subleased Premises), thereby increasing the
minimum rent payable by Sublessor to Sublessee for the Subleased Premises to
equal Ninety-One Thousand Seven Hundred Seventy-Six and 00/100 Dollars
($91,776.00) per month. Such amount shall further increase as set forth below.
Additionally, Sublessee shall continue to be required to pay to Sublessor
Sublessee's proportionate share (as such proportionate share is modified in
Section 4 below) of taxes, insurance costs and Operating Costs within five (5)
days of Sublessor's demand therefor, as further set forth in the Sublease.
(c) Commencing on the Second Must Take Commencement Date, the minimum
rent for the Subleased Premises shall be increased by an amount equal to Twelve
Thousand and 00/100 Dollars ($12,000.00) per month (i.e., the square footage of
the First Must Take Space, 50,000, multiplied by $0.24 per rentable square foot
per month) (in addition to the minimum rent for the original Subleased Premises
and First Must Take Space), thereby increasing the minimum rent payable by
Sublessor to Sublessee for the Subleased Premises to equal One Hundred Three
Thousand Seven Hundred Seventy-Six and 00/100 Dollars ($103,776.00) per month.
Such amount shall further increase as set forth below. Additionally, Sublessee
shall continue to be required to pay to Sublessor Sublessee's proportionate
share (as such proportionate share is modified in Section 4 below) of taxes,
insurance costs and Operating Costs within five (5) days of Sublessor's demand
therefor, as further set forth in the Sublease.
(d) Commencing on the Third Must Take Commencement Date, the minimum
rent for the Subleased Premises shall be increased by Forty-Three Thousand Eight
Hundred Twenty-Four and 00/100 Dollars ($43,824.00) per month (i.e., the
rentable square footage of the Third Must Take Space, 182,600, multiplied by
$0.24 per rentable square foot per month) (in addition to the minimum rent for
the original Subleased Premises, First Must Take Space and Second Must Take
Space), thereby increasing the minimum rent payable by Sublessor to Sublessee
for the Subleased Premises to equal One Hundred Forty-Seven Thousand Six Hundred
and 00/100 Dollars ($147,600.00) per month. Additionally, Sublessee shall
continue to be required to pay to the Sublessor Sublessee's proportionate shares
(as such proportionate share is modified in Section 4 below) of taxes, insurance
costs and Operating Costs within five (5) days of Sublessor's demand therefor,
as further set forth in the Sublease.
4. Proportionate Share; Pass Throughs. (a) Sublessor and Sublessee
acknowledge and agree that, notwithstanding anything to the contrary contained
in the Sublease, (i) Sublessee's proportionate share of taxes, insurance,
Operating Costs, and all other items for which Sublessee is responsible for its
proportionate share under the Sublease, is currently equal to Fifty-Four and
05/100 Percent (54.05%), (ii) notwithstanding the foregoing, Sublessee's
proportionate share of warehouse space (the "Warehouse Proportionate Share") is
currently equal to Fifty-Four and 78/100 Percent (54.78%) (i.e., 328,650
rentable square feet of warehouse space in the Subleased Premises out of 600,000
rentable square feet of warehouse space in the Master Premises), and (iii)
Sublessee's proportionate share of office space (the "Office Proportionate
Share") is currently equal to Twenty-Five Percent (25%) (i.e., 3,750 rentable
square feet of office space in the Subleased Premises out of 15,000 rentable
square feet of warehouse space in the Master Premises), as set forth in the
Sublease; accordingly, notwithstanding the foregoing, any amounts
for which Sublessee is responsible under the Sublease that are calculated based
upon the separate proportionate shares of the office space and warehouse space
respectively (e.g., utilities that are not separately metered and amounts for
maintenance of the Trailer Parking area, all as more particularly described in
the Sublease) shall be calculated using such proportionate shares of the
warehouse and office space, which shares shall increase in accordance with the
provisions of subsections (b), (c) and (d) below.
(b) Notwithstanding subsection (a) above, effective on the First Must
Take Commencement Date, until the Second Must Take Commencement Date, (i)
Sublessee's proportionate share of taxes, insurance, Operating Costs, and all
other items for which Sublessee is responsible for its proportionate share under
the Sublease, shall equal Sixty-Two and 18/100 Percent (62.18%), (ii)
notwithstanding the foregoing, the Warehouse Proportionate Share shall be
increased to equal Sixty-Three and 11/100 Percent (63.11%) (i.e., 378,650
rentable square feet of warehouse space in the Subleased Premises and First Must
Take Space out of 600,000 rentable square feet of warehouse space in the Master
Premises), and (iii) notwithstanding the foregoing, the Office Proportionate
Share shall remain at Twenty-Five Percent (25%).
(c) Notwithstanding subsections (a) and (b) above, effective on the
Second Must Take Commencement Date, until the Third Must Take Commencement Date,
(i) Sublessee's proportionate share of taxes, insurance, Operating Costs, and
all other items for which Sublessee is responsible for its proportionate share
under the Sublease, shall be increased to equal Seventy and 31/100 Percent
(70.31%), (ii) notwithstanding the foregoing, the Warehouse Proportionate Share
shall be increased to equal Seventy-One and 45/100 Percent (71.45%), and (iii)
notwithstanding the foregoing, the Office Proportionate Share shall remain at
Twenty Five and 00/100 Percent (25%).
(d) Notwithstanding subsections (a), (b) and (c) above, effective on the
Third Must Take Commencement Date, for the remainder of the term of Sublease,
(i) Sublessee's proportionate share of taxes, insurance, Operating Costs, and
all other items for which Sublessee is responsible for its proportionate share
under the Sublease, shall be increased to equal One Hundred Percent (100%), (ii)
notwithstanding the foregoing, the Warehouse Proportionate Share shall be
increased to equal One Hundred Percent (100%), and (iii) notwithstanding the
foregoing, the Office Proportionate Share shall be increased to equal One
Hundred Percent (100%).
(e) The last sentence of Section 9(b) of the Original Sublease is hereby
deleted in its entirety and shall be of nor further force and effect.
(f) Sublessor hereby agrees that, effective as of the First Must Take
Commencement Date, the monthly amount charged to Sublessee for Sublessee's share
of taxes, insurance, Operating Costs (other than utilities) and Sublessor's
repair obligations under the Original Sublease shall not exceed a total of two
and one-half cents ($0.025) per rentable square foot of the subleased Premises
per monthly, calculated on a cumulative basis (the "Cap"). Nothing contained
herein shall limit (i) the costs of utilities for which Sublessee is responsible
under the Sublease (and notwithstanding anything to the contrary contained
herein, Sublessee shall be
liable for all utilities used relating to the Subleased Premises), or (ii) any
other repair and/or maintenance obligations of Sublessee under the Sublease.
5. Letter of Credit. Concurrently with Sublessee's execution of this
Amendment, Sublessee shall deliver to Sublessor and irrevocable standby letter
of credit ("Letter of Credit") in the amount of One Hundred Forty-Seven Thousand
Six Hundred and 00/100 Dollars ($147,600.00) (the " Commitment Fee Amount")
which Letter of Credit shall (i) be issued by a financial institution reasonably
acceptable to Sublessor, (ii) have a Standard and Poor's rating of "A-" or
better, (iii) be acceptable in form and content to Sublessor, (iv) have an
initial term of at least twelve (12) months, and be renewed at least thirty (30)
days prior to expiration for additional period of twelve (12) months, and be
renewed at least thirty (3) days prior to expiration for additional periods of
twelve (12) months each until sixtieth (60/th/) day following the Expiration
Date, (iv) show Sublessor as beneficiary and Sublessee as account party, (v) be
in the form and content of Exhibit "C" attached hereto, and (vi) contain such
additional terms and conditions as may be reasonably required by any lender of
Sublessor, or by the issuing financial institution. The Letter of credit shall
be held by Sublessor as security for the full and faithful performance by
Sublessee of the terms, covenants and conditions of the Sublease. Sublessee
shall pay all expenses, points and/or fees incurred by Sublessee in obtaining
Letter of Credit.
Without limiting the rights of Sublessor under the Sublease, and subject
to Sublessor's rights in the immediately following sentence, if Sublessee
breaches or defaults under any provisions of the Sublease, including but not
limited to the payment of minimum rent or other amounts payable by Sublessee
under the Sublease, and such breach or default continues beyond the expiration
of any applicable notice and cure period specifically provided for in the
Sublease for such breach or default, then Sublessor may draw on all or the
portion of such Letter of Credit determined by Sublessor in its reasonable
discretion to be necessary, and use, apply or retain such drawn funds for the
payment of any rent other sums in default or to compensate Sublessor for any
other loss or damage which Sublessor may suffer by reason Sublessee's default,
to compensate Sublessor for any loss or damage which Sublessor may suffer
thereby, to reimburse Sublessor for costs incurred in connection with the
Sublease (including, without limitation, costs incurred to improve the Subleased
Premises, any improvement costs and any brokerage commissions and attorneys'
fees), or as prepaid rent to be applied against Sublessee's rent and other
payment obligations. The proceeds received from any draw shall constitute
Sublessor's property, and not Sublessee's property or the property of the
bankruptcy estate of Sublessee. If Sublessee (i) breaches or defaults under any
provision of the Sublease more than once n any twelve (12) monthly period,
including but not limited to the payment of rent, or (ii) fails to renew the
Letter of Credit at least thirty (30) days prior to its expiration, then
Sublessor, in its sole and absolute discretion, shall be entitled to draw upon
the entire Commitment Fee Amount. The use, application or retention of the
Letter of Credit, or any portion thereof, shall not prevent Sublessor from
exercising any other rights or remedies provided under the Sublease, and shall
not operate as a limitation on any recovery to which Sublessor may otherwise be
entitled. Any amount of the Letter of Credit which is drawn upon by Sublessor
shall be used, applied or retained by Sublessor to apply in payment of rent or
to cure any other default. If Sublessor so uses or applies all or any portion of
said drawn Letter of Credit Sublessee shall within five (5) business days after
written demand therefore replace the original Letter of Credit with a new Letter
of Credit in
the same amount as the Commitment Fee Amount as of the sate the Letter of Credit
was drawn upon by Sublessor, and in substantially the same form as the original
Letter of Credit. Sublessor shall not be required to keep said Letter of Credit
or any drawn funds thereunder separate from its general accounts. If Sublessee
performs all of Sublessee's obligations under the Sublease, then within sixty
(60) days following the expiration of the term of the Sublease, and after
Sublessee has vacated the Subleased Premises and surrendered the same to
Sublessor in accordance with the terms and conditions of the Sublease, the
Letter of Credit shall be returned to Sublessee. No trust relationship is
created herein between Sublessor and Sublessee with respect to the Letter of
Credit. Sublessee acknowledges that Sublessor has the right to sell, transfer or
mortgage its interest in the Subleased Premises and in the Sublease and
Sublessee agrees that in the event of any such sale, transfer or mortgage,
Sublessor shall have the right to transfer or assign the Letter of Credit to the
transferee or mortgagee, and in the event of any such transfer or mortgage (i)
Sublessee shall look solely to such transferee or mortgagee for the return of
the Letter of Credit and (ii) Sublessee shall pay all transfer fees or charges
imposed by the issuing banks as a result of such transfer.
Sublessor and Sublessee acknowledge and agree that in no event or
circumstance shall the Letter of Credit or any renewal thereof or substitute
therefor be deemed to be or treated or intended to serve as a "security deposit"
within the meaning of applicable state law. The parties hereto (A) recite that
the Letter of Credit is not intended to serve as a security deposit, and any and
all other laws, rules and regulations applicable to security deposits in the
commercial context ("Security Deposit Laws") shall have no applicable or
relevance thereto and (B) waive any and all rights, duties and obligations
either party may now or, in the future, will have relating to or arising from
the Security Deposit Laws.
6. Acceptance of Subleased Premises and Must Take Space; Improvements.
(a) Sublessee hereby acknowledges that it has been in occupancy of the
Subleased Premises, as described above. The Subleased Premises and Must Take
Space shall be leased by Sublessor to Sublessee in their current condition,
"With All Faults", "Without Any Representations or Warranties". Notwithstanding
the foregoing, Sublessor shall, at it s sole cost and expense (subject to the
Heater Reimbursement, as such terms defined below), using Sublessor's standard
materials, specifications, guidelines and procedures, perform, or cause the
lessor under the Master Lease to perform, the following work in the Subleased
Premises (collectively, "Sublessor's Work"): (a) re-carpet the office portion of
the Subleased Premises existing as of the date of this Amendment, using
industrial grade carpet; (b) re-paint the painted walls in the office portion of
the Subleased Premises existing as of the date of this Amendment; (c) install
industrial grade ceiling tile, vinyl tile and vinyl base in the office portion
of the Subleased Premises existing as of the date of this Amendment, in areas
determined by Sublessor; (d) install and additional five (5) dock doors in the
warehouse portion of the Subleased Premises, in areas to be mutually agreed upon
by Sublessor and Sublessee; (e) cause the floors in the Must Take Space to be in
reasonably good working order (taking into the age of the Must Take Space); and
(f) perform the improvements and repairs set forth on Exhibit "B" attached
hereto. Notwithstanding the foregoing, Sublessee shall reimburse to Sublessor,
within five (5) days after demand by Sublessor (the "Heater Reimbursement"), all
costs and expenses incurred by
Sublessor in connection with any replacement of heaters in the Subleased
Premises, up to a maximum of One Thousand Nine Hundred and 00/100 Dollars
($1,900.00) per heater. Additionally, Sublessor and Sublessee acknowledge and
agree that: (i) Sublessor's Work may be performed while Sublessee is in
occupancy of the Subleased Premises (including any portion of the Must Take
Space), Sublessee hereby permitting access to the Subleased Premises to
accomplish the same; (ii) Sublessee shall not (and shall direct its agents to
not) interfere with Sublessor while Sublessor's Work is being performed; (iii)
Sublessor shall use commercially reasonable efforts to not materially and
unreasonably interfere with Sublessee's use of the Subleased Premises while
Sublessor's Work is being performed, and (iv) Sublessee will not be entitled to
any abatement of rent (however denominated) on account of the performance of
Sublessor's Work while Sublessee is in occupancy of the Subleased Premises
(including any portion of the Must Take Space), Sublessee hereby waiving any
such rights.
Notwithstanding the foregoing, Sublessor hereby agrees that it will not
pass through to Sublessee the costs of the work described in this Section 6(a),
subject, however, to the Heater Requirement.
(b) Sublessor and Sublessee hereby agree that, subject to reimbursement
by Sublessee (as described below), Sublessor shall repair and maintain the
Concrete Dock Areas and Floors (as such terms are defined below), and Sublessee
shall pay all costs incurred by Sublessor in connection therewith (subject to
the Cap) together with the Sublessee's payments of monthly minimum rent.
Sublessor and Sublessee acknowledge that concrete dock areas are currently
located in the warehouse portion of the original Subleased Premises (the
"Concrete Dock Areas"). Sublessors and Sublessee hereby agree that if repairs to
the concrete floors in the Premises (the "Floors') or to the Concrete Dock Areas
are required at any time during the term of the Sublease as a result of (A) the
usage of the Concrete Dock Areas and/or Floors in a manner not recommended by
the manual therefor, or in a manner exceeding the manufacturer's recommendations
therefore, by Sublessee or its employees, agents, contractors, licensees and/or
invitees, or (B) the negligence or willful acts of Sublessee or its employees,
agents, contractors, licensee and/or invitees, then Sublessee shall, at its sole
cost and expense, cause the Concrete Dock Areas and the Floors to be repaired,
and such repairs shall be performed in accordance with the terms of Section 7
below, and shall accordingly be considered "Sublessee Repairs" (provided,
however, that the Repair Date, as defined in Section 7, shall not be applicable
to such repairs).
(c) Sublessee hereby agrees and warrants that it has investigated and
inspected the condition of the Subleased Premises and Must Take Space and the
suitability of same for Sublessee's purposes, and Sublessee does hereby waive
and disclaim any objection to, cause of action based upon, or claim that its
obligations hereunder should be reduced or limited because of the condition of
the Subleased Premises or the Must Take Space or the suitability of same for
Sublessee's purposes. Sublessee acknowledges that neither Sublessor nor any
agent nor any employee or Sublessor has made any representations or warranty
with respect to the Subleased Premises or the Must Take Space or with respect to
the suitability of the same for the conduct of Sublessee's business, and
Sublessee expressly warrants and represents that Sublessee has relied solely on
it sown investigation and inspection of the Subleased Premises and Must Take
Space in its decision to enter into this Amendment and let the Subleased
Premises and Must Take Space in
their current condition. All representations and warranties contained in his
section shall be subject tot he Sublessor's improvements listed above in
paragraph 6(a), the Tenant's walk through inspection list detailed in Exhibit B
attached hereto, and subject to defects in workmanship or materials utilized in
such improvements performed by Sublessor, their agents, employees, or
representatives.
7. Sublessee Repairs. Within sixty (60) days after the mutual execution
and delivery of this Amendment (the "Repair Date"), Sublessee shall, at
Sublessee's sole cost and expense, perform maintenance and repairs to the
lighting fixtures in the subleased Premises, as set forth on Exhibit "B"
attached hereto (collectively, the "Sublessee Repairs"). The Sublessee Repairs
shall be subject to the terms of the Sublease, and shall be performed by
Sublessee using materials and workmanship of similar quality tot hat already
installed,, all in a manner reasonable satisfactory to Sublessor. Sublessor
shall have the right, but not the obligation, to oversee and monitor the
Sublessee Repairs. All items in connection with the Sublessee Repairs
(including, without limitation, plans and specifications therefor) shall be
subject to the prior written approval of Sublessor. In connection with the
Sublessee Repairs, Sublessee shall not interfere with Sublessor's performance of
the Sublessor's Work or with any other actives of Sublessor at the Master
Premises. Any costs or expenses incurred by Sublessor in connection with the
Sublessee Repairs shall be reimbursed by Sublessee within five (5) days after
demand by Sublessor. Sublessee shall at its sole cost and expense obtain all
necessary approvals and permits pertaining to the Sublessee Repairs. Sublessee
shall perform the Sublessee Repairs in a good and workmanlike manner, in
accordance with all applicable federal, state, county and municipal laws, rules
and regulations, pursuant to a valid building permit, if applicable, and in
conformance with Sublessor's construction rules and regulations. Sublessee
hereby indemnifies, defends and agrees to hold Sublessor free and harmless from
all liens and claims of lien, and all other liability, claims and demands
arising out of any work done or material supplied to the Subleased Premises by
or at the request of Sublessee in connection with the Sublessee Repairs.
Sublessee shall at all time s keep the Subleased Premises and Master Premises
free all liens. Sublessee shall provide Sublessor with evidence that Sublessee
carries "builder's All Risk" insurance in an amount approved by Sublessor
covering the performance of the Sublessee Repairs, and such other insurance as
Sublessor may reasonable require, it being understood that all Sublessee Repairs
shall be insured by Sublessee pursuant to the Sublease immediately upon
completion thereof. In addition, Sublessor may, in its discretion, require
Sublessee to obtain a lien and completion bond or some alternate form of
security satisfactory to Sublessor in an amount sufficient to ensure the
lien-free completion of the Sublessee Repairs and naming Sublessor as a
co-obligee.
8. Attorney's Fees. In the event either party shall commence an action
to enforce any provision of this Amendment, the prevailing party in such action
shall be entitled to receive from the other party, in addition to damages,
equitable or other relief, and all costs and expenses incurred, including
reasonable attorneys fees and court costs and fees incurred to enforce any
judgment obtained.
9. Severability. This provision with respect to attorneys fees incurred
to enforce a judgment shall be severable from all other provisions of this
Amendment, shall survive and judgment, and shall not be deemed merged into the
judgment.
10. Authority. Sublessee has full power and authority to enter into
this Amendment and the person signing on behalf of Sublessee has been fully
authorized to do so by all necessary corporate action on part of Sublessee.
11. Estoppel. Sublessee warrants, represents and certifies to Sublessor
that as of the date of this Amendment: (a) Sublessor is not in default under the
Sublease; and (b) Sublessee does not have nay defenses or offsets to payment of
rent and performance of its obligations under the Sublease as and when becomes
due.
12. Square Footage. The square footages set forth in this Amendment
(including, without limitation, those set forth in the Recitals to this
Amendment) are hereby stipulated by Sublessor and Sublessee to be true and
correct.
13. Landlord's Waiver. Within five (5) days after the mutual execution
and delivery of this Amendment, provided that Sublessee is not in material
breach or default under the Sublease, and, without limiting the foregoing,
Sublessee has paid all amounts due and owing under the Sublease and has
delivered the Letter of Credit to Sublessor pursuant to this Amendment, then
Sublessor and Sublessee shall execute a "Landlord's Waiver" in the form and
content attached hereto as Exhibit "D".
14. Sublease in Full Force. Except for those provisions which are
inconsistent with this Amendment, all other terms, covenants and conditions of
the Sublease shall remain unmodified and in full force and effect.
IN WITNESS WHEREOF, this Amendment is executed as of the date first
written above.
Sublessor: Sublessee:
APL LOGISTICS WAREHOUSE ICON HEALTH AND FITNESS, INC., a
MANAGEMENT SERVICES, INC., a Utah Corporation
Florida corporation, fka GATX By: /s/ Jon M. White
Logistics, Inc. ---------------------------------
Name: Jon M. White
----------------------------
By: /s/ M. Gardner Title: Sr. V.P. of Mfg
------------------------------------ ---------------------------
Name: M. Gardner
------------------------------
Title: COO
----------------------------
By: ________________________________
Name:___________________________
Title:__________________________
EXHIBIT "A"
SUBLEASED PREMISES
EXHIBIT "B"
WORK
Clearfield Distribution Center - Bldg #1
ICON Requested Improvements
Item # Description Reference - Landlord Repairs Cost of Work Respons. Party
1.1 Repair/correct areas along perimeter well where there Included below
slight settling has occurred
1.2 Clean shop area walls and floor and paint surfaces, $ 3,820 APLL
allowance value
1.3 Repair concrete slab stress cracking (ICON and ___________) $ 10,795 APLL
ICON affected area approximately 8895 s.f.
1.4 Repair spelled and gouged areas at construction joints on $ 728 APLL
concrete slab affected area approximately 110 s.f.
1.5 Retrofit of Interior rail to provide same elevation as pricing below N/A
remaining Pricing separated for review as an alternate
consideration
1.6 Repair unit heaters and or heat exchanger in warehouse $ 11,872 ICON/APLL
area (53 each @ $224/each)
1.7-A Install dock doors at 4 existing oversized knock out locations
Structural engineering costs and permits $ 3,193
Sawcutting and Install dock doors $ 19,062
Construct pit & furnish & install dock leveler $ 25,850
Furnish & Install vehicular restraint $ 15,930 None
Electrical feeder to level and Vehicular restraint $ 1,711
Furnish & install dock seals $ 2,788
New electrical panel for door circuitry $ 634
-------------
Subtotal $ 70,178 Ten Imp
Cost per each door $17,544
1.7-B Install dock doors at 6 new locations APLL
Structural engineering costs and permits $ 6,293
Sawcutting & Install dock doors $ 38,125 $75,440
Construct Plt & furnish & install dock leveler $ 51,690
Furnish a Install vehicular restraint $ 33,860
Electrical feeder to level and vehicular restraint $ 3,512
Furnish & Install dock seals $ 5,591 M/L
New electrical panel for door circuitry $ 1,270
-------------
Subtotal $ 140,380
Cost per each door including electric $17,544 $ 105,284 @ __ doors
1.8 Repair rain water gutters (completed in 2000 payment $ 1,575 APLL
outstanding)
1.9 Repair exterior light fixture (completed in 2000 payment $ 3,918 APLL
outstanding)
1.1 Replace, Where required, existing vertical caulk precast $ 2,000 APLL
panel joints (recaulk all vertical joints $9713, where maximum
required allow $2000)
1.11 Repair existing dock doors including material handling
equipment
Dock Door #19 - replace truck restraint & service leveler $ 4,388 APLL
Dock Door #20 - replace with steel faced bumper & service leveler $ 448 "
Dock Door #21 - replace truck restraint & repair pit welds $ 872 "
Dock Door #22 - servicedock leveler $ 139 "
Dock Door #23 - reweld pit frame, grout corner of frame
with concrete re-anchor dock bumpers and dock leveler $ 338
Dock Door #24 - remove and replace dock leveler in new
concrete pit replace truck restraint $ 7,616 "
Dock Door #25 - replace with steel faced bumper & service $ "
leveler $ 448 "
Dock Door #26 - service dock leveler $ "
Dock Door #27 - service dock leveler $ 134
Dock Door #28 - service dock leveler $ 134
$ 134
-------------
$ 14,426 APLL
Clearfield Distribution Center - Bldg #1
ICON Requested Improvements
1.12 Office Finishes - standard industrial grade finishes only
Demolition of existing floor finishes and haul off $ 3,136
Repair existing drywall and paint $ 14,952
Carpet square replacement in computer room $ 3,906
Carpet replacement $ 17,117
Vinyl composition tile and vinyl base - replacement $ 8,502
Rubber flooring at entry $ 3,276
Paint - doors and casings throughout office area $ 4,301
Remove ceiling tile throughout offices and replace with new tile $ 13,256
Replace toilet petitions at tower office area $ 1,344
Repair and or finish existing drywall at tower office $ 560
Final clean up of all office areas $ 2,240
-----------
Subtotal $ 72,490 APLL
1.13 Recaulk exterior windows on south elevation of building $ 2,000 APLL
(recaulk all exterior windows on south elevation of building $5600) maximum
(recaulk where required south elevation of building allow $2000)
1.14 Repair roof leak over private office (Northeast corner of Bldg) $ 1,344 APLL
1.15 Asphalt overlays on driveway access and repair to truck court area see 1.17 below *74/26%
Roadway overlay from City Road 700 South to and of Naptech property $ 22,899
Roadway overlay from Naptech property to ProLogic south property line $ 37,050
1.16 Asphalt patching and or repair in truck court area between Bldg 1& 2 Include below
1.17 Road Improvements associated with Building #1 $ 44,362 see 1.15
Demolition of truck court area serving Bldg #1. regrade to obtain
approp. elevation at dock doors and install new concrete truck apron
(Cost information to be finalized after completion of civil engineered
survey and construction plan) Amort (a)
Concrete demo $ 1,815 Amort (a)
Asphalt grinding and reuse as asphalt base material $ 2,000 Amort (a)
Fine grading all base areas for proper slope and gradiant and install 4' $ 20,045
asphalt section Amort (a)
Install 8' x 3ft concrete water way, 3 (2x2) catch basins & 12 RCP tied $ 13,923
to existing storm drain system Amort (a)
Install 8' reinforced concrete truck apron $ 42,500 Amort (a)
Install 2' asphalt overlay in truck court $ 12,480 APLL
Subtotal $ 137,125
1.18 Replace and/or repair, where required, overhead high bay $ 16,132 ICON/APLL
lighting ballast and lamps (52 each $310/each)
ICON Health & Fitness, Inc. June 13, 2001
GATX WALK THROUGH INSPECTION
* . Battery room add on floor
. 2 Doors metal missing from door frame
. Cinder black broken out around door frame
* . Drain plugged up with dirt and acid drippings
Truckers back office
* . Forklift damage to all sheet rock around outside of office
. Ink spillage and markings over power panel
. All major seams in floor have wide cracks
* . Major cracking through all warehoues on GATX's side
(NOT MAJOR)
. Southeast corner of GATX side:
* 10' x 20' Floor needs to be cut out and replaced (located in 50,000 of
adjacent to ICON)
* 4' x 4' Floor needs to be cut out and replaced
* . Many holes through warehouse need to be patched, 6" to 12" area's many
other areas need repaching
. Concern about all concrete "Age"
. High volume usage forklift traffic (all 5000 lbs lifts)
* . R-3 Fire Exit Door - water was running in when it was raining
* . Northeast Bay Door - train access door, bottom 2 panels are bent over
. R-4 Fire Exit Door - wall by inside door is cracked badly
* . Train Access Bay Door - bottom 2 panels bowed out
Dock #5
. #3 panel is bent
. Outside dock curtain is broken
. Cement all around is cracked
* . Dock frame broken, needs welding
* All items will be replaced or repaired as indicated.
ALL OTHER ITEMS ARE NOTED AS THE CURRENT CONDITION OF THE PROPERTY UPON
OCCUPANCY BY ICON.
Dock #6
. Bottom 2 panels bowed out
. Cement is broken and cracked all around
. Outside dock curtain is broken
Dock #7
. 3 bottom panels are bowed out
Dock #8
. Cement is cracked all around
* . Dock bumpers are broken
. Heavy patching is needed around dock
* Dock #9 Replace dock leveler from 20,000 lb.
. Heavy metal patching has been done around dock
* . Dock bumpers on both sides are broken will be replaced with dock levelers
Dock #10 Replace dock leveler from 20,000 lb
. Heavy patching has been done around dock
. Cement settling around dock are "High and Low"
* . Bumper pad left side will be replaced - included in costs of dock leveler
Dock #11
. Bottom panel bowed out
. Heavy metal patching has been done around dock * o Bumper pad's are both
broken - replace
Dock #12
* . Door latch is broken
. Bottom panel is bowed out
* . Bumper is broken and the cement is broken out on the right side
Dock #13
. Ok inside
* . Both bumpers broken, the cement is breaking away on the outside
Dock #14
. Cement around the dock is broken
* . Bumper guards are both broken
Dock #15
. Dock plate, had had metal patching done
* . Bumper guards are both broken
. Electrical box is open, wires are exposed
. Outside wall seems are cracked badly and crackle is coming out
* . Rain gutter is bowed down and seams are leaking down the wall
* . Needs down spout repaired or replaced
. [ILLEGIBLE] Pedestrian walk 10' section settling Approximately 2"
. 53' trailers landing pad indents into the asphalt
Offices
* . Sheet rock missing from ceiling by locker room, approximately 3 sheets
* . Several roof leaks by restrooms and hallways
. Looks like water is leaking between window panels through front office
EXHIBIT "C"
FORM OF LETTER OF CREDIT
[ISSUING BANK]
BENEFICIARY: APL LOGISTICS WAREHOUSE MANAGEMENT SERVICES,
INC., a Florida corporation (fka GATX
Logisictics, Inc.), and its successors and
assigns
CUSTOMER ICON HEALTH AND FITNESS, INC., a Utah
corporation ("ICON")
MAXIMUM AMOUNT ($147,600.00) (USD)
DATE: ___________________________________
EXPIRY DATE: ___________________________________
LETTER OF CREDIT NO.: ___________________________________
TO: APL LOGISTICS WAREHOUSE MANAGEMENT SERVICES, INC., a Florida corporation,
and its successors and assigns
Ladies and Gentlemen:
At the request of our customer, ICON, for valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, we hereby issue in
favor of APL LOGISTICS WAREHOUSE MANAGEMENT SERVICES INC., a Florida
corporation, and its successors and assigns (collectively, "APL), this
irrevocable standby letter of credit (the "Letter of Credit") in the amount of
One Hundred Forty-Seven Thousand Six Hundred and 00/100 Dollars ($147,600.00)
(the "Commitment Fee Amount"). This Letter of Credit shall remain in effect up
to and including [insert date which is one (1) year from date of issuance] (the
"Expiry Date"). APL may draw against the Commitment Fee Amount under this Letter
of Credit on demand and at sight, without any period of grace, by presenting to
us at:
____________________________________________
____________________________________________
____________________________________________
in person, or by facsimile, on or before the Expiry Date, during the hours in
which we are open for business, the following documents (the "Documents").
1. APL's written demand for payment, signed by an individual purporting
to be an officer or agent of APL, certifying that (a) ICON is in
breach or default beyond the applicable notice and cure periods
under the terms of that certain Sublease dated July 6, 1994 (as
amended from time to time, the "Sublease"), or (b) there has been
any filing of a voluntary petition by ICON (or involuntary petition
by ICON's creditors) under the United States Bankruptcy Code, or (c)
ICON has not timely renewed the Letter of Credit pursuant to the
Sublease;
2. The original of this Letter of Credit; if by facsimile, the original
shall follow via courier.
Partial drawings shall be permitted. Forthwith upon receipt of the
Documents, we shall pay to APL the indemnity amount, to a maximum amount of the
Commitment Fee Amount, without inquiring whether APL has a right to such amount
as between APL and our customer.
This Letter of Credit shall be automatically extended for additional
consecutive one (1) year periods unless at thirty (30) days prior to the then
applicable Expiry Date we shall notify you in writing by registered or certified
mail (return receipt requested) to the above address or to such other address
provided to us in writing, that we elect not to renew this Letter of Credit for
such additional year. Notwithstanding the foregoing, this Letter of Credit shall
expire in full and final on the date that is sixty (60) days after the
Expiration Date (as such term is defined in the Sublease) of the Sublease.
This Letter of Credit is freely transferable in its entirety without
consent or approval. In the event of such transfer, the transferees shall be
deemed the beneficiaries hereunder in the full place and stead and with all
rights hereunder of APL
Except as otherwise expressly stated, this Letter of Credit is subject to
the International Standby Practices (ISP98), International Chamber of Commerce
Publication No. 590 (the "ISP98"). As to matters not covered by ISP98, this
Letter of Credit shall be subject to and governed by the laws of the State of
Utah.
We hereby undertake to APL that drafts drawn and negotiated in compliance
with the terms of this Letter of Credit shall meet with honor upon presentation
to us.
Very truly yours,
[Name of Issuing Bank]