COMMERCIAL LEASE BY AND BETWEEN
RMS PROPERTIES II, L.L.C.,
AN ILLINOIS LIMITED LIABILITY COMPANY,
AS LANDLORD
AND
PETMED EXPRESS, INC.,
A FLORIDA CORPORATION,
AS TENANT
Exhibit 99.4
TABLE OF CONTENTS
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PAGE
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1. Definitions................................................. 1
2. Use; Compliance; Signs...................................... 2
3. Rent; Taxes; Expenses, Security Deposit..................... 2
4. Gross Rent.................................................. 2
5. Condition of Premises; Maintenance; Repair;
Alterations; and Hazardous Substances....................... 3
6. Insurance; Waiver of Subrogation; Indemnity................. 4
7. Tenant's Property........................................... 5
8. Construction; Liens......................................... 6
9. Casualty/Damage and Destruction............................. 6
10. Condemnation................................................ 6
11. Assignment; Subletting; Effect of Bankruptcy................ 7
12. Tenant's Default; Remedies; Re-Entry; Holding Over.......... 7
13. Quiet Enjoyment; Landlord's Default;
Limitation of Landlord's Liability.......................... 8
14. Amendment; Waiver; Approval; Consent........................ 9
15. Notices..................................................... 9
16. Landlord's Reserved Rights; Access; Easements............... 10
17. Subordination; Estoppel Certificate......................... 10
18. Accord and Satisfaction..................................... 11
19. Severability................................................ 12
20. Time........................................................ 12
21. Successors and Assigns...................................... 12
22. Relationship of Parties..................................... 12
23. Captions and Section Numbers................................ 12
24. Schedules; Exhibits......................................... 12
ii
Exhibit 99.4
25. Brokerage................................................... 12
26. Authority................................................... 13
27. Applicable Law.............................................. 13
28. Attorneys' Fees............................................. 13
29. Tender and Delivery of Lease................................ 13
30. Radon Gas................................................... 13
31. Option to Shorten Term...................................... 13
32. Rent Abatement.............................................. 13
iii
Exhibit 99.4
COMMERCIAL LEASE
----------------
THIS LEASE ("Lease") dated May 31, 2001, is made between RMS PROPERTIES
II, L.L.C., an Illinois limited liability company ("Landlord"), and
PETMED EXPRESS, INC., a Florida corporation ("Tenant").
WITNESSETH:
-----------
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord,
the Premises described below for the Term (as hereafter defined) and
subject to the terms, covenants and conditions hereinafter set forth:
1. DEFINITIONS. Unless the context otherwise specifies or requires,
the following terms shall have the meanings herein specified:
1.1 Annual Rent: The annual rent payable monthly as set forth
below:
ANNUAL RENT MONTHLY PAYMENT
----------- ---------------
1st year $166,498.00 $13,874.83
2nd year $166,498.00 $13,874.83
3rd year $173,157.92 $14,429.83
4th year $180,084.23 $15,007.02
5th year $187,287.60 $15,607.30
1.2 Building: Collectively the building(s) and improvements now
existing and hereafter constructed on the Land.
1.3 Commencement Date: May 31, 2001
1.4 Event of Default: Those events described in section 12.1
hereof.
1.5 Governmental Authority: Any federal, state, county,
municipal or other governmental department, entity, authority,
commission, board, bureau, court, agency or any instrumentality of any
of same.
1.6 Governmental Requirement: Any law, enactment, statute,
code, ordinance, rule regulation, judgment, decree, writ, injunction,
franchise, permit, certificate, license, authorization, agreement or
requirement of any Governmental Authority now existing or hereafter
enacted, adopted, promulgated, entered, or issued applicable to the
Premises.
1.7 Land: That certain real property located at 1441 S.W. 29th
Street, Pompano Beach, Florida, as more particularly set forth in
Exhibit "A" attached hereto, together with all appurtenances relating
thereto.
1.8 Premises: That portion of the Building crosshatched on
Exhibit "B" containing approximately 19,588 net rentable square feet.
In addition, for a period not to exceed sixty (60) days after the
Commencement Date, Tenant shall be entitled to occupy that portion of
the Building crosshatched on Exhibit "C" containing approximately 882
square feet attached hereto and made a part hereof provided Tenant
shall pay a monthly rent of $624.75 per month for such space. Monthly
installments for any fractional calendar month shall be prorated.
1
Exhibit 99.4
1.9 Term: That time period between the Commencement Date and
expiring five (5) years thereafter unless the Term is shortened by
Tenant pursuant to the provisions of Section 31 hereof.
2. USE; COMPLIANCE; SIGNS.
-----------------------
2.1 Tenant shall not do, bring, keep or permit to be done in, on
or about the Premises, nor bring, keep or permit to be brought
therein, anything which is prohibited by, or will, in any way conflict
with any Governmental Requirement. Tenant shall not do or permit
anything to be done in, on or about the Premises for any improper,
immoral, or unlawful purpose, nor shall Tenant cause, maintain or
permit any nuisance in, or about the Premises.
2.2 All signs and symbols placed in or about doors, windows or
elsewhere in or about the Premises, shall be subject to the prior
written consent of the Landlord, provided that Tenants current signage
inside and outside the Building are hereby approved by Landlord and
Tenant shall be entitled to maintain and replace same so long as the
size or location of such signage is not materially changed.
3. RENT; TAXES; EXPENSES; DEPOSIT.
-------------------------------
3.1 Tenant shall pay each monthly installment of Rent set forth
above (plus all sales taxes from time to time imposed by any
Governmental Authority in connection with rents paid by Tenant under
this Lease), in advance on the first calendar day of each month during
the Term. Monthly installments for any fractional calendar month, at
the beginning or end of the Term, shall be prorated based on the
number of days in such month which fall during the Term. Tenant shall
pay all Rent, without demand, deduction or set off, to Landlord at the
place specified for notice in Section 15 below. Tenant also shall pay
a late charge ("Late Charge") of Fifty Dollars ($50.00) with each late
payment of Rent as an administrative fee. The provisions herein for
such a Late Charge shall not be construed to extend the date for
payment of any sums required to be paid by Tenant hereunder or to
relieve Tenant of its obligations to pay all such items at the time or
times herein stipulated. Landlord acknowledges receipt from Tenant of
the Rent for the month of June. Landlord also acknowledges receipt
from Tenant of a security deposit in the amount of $42,500.00 (the
"Deposit"). The Deposit shall be held as security for the payment of
Rent and other sums of money payable by Tenant under this Lease, and
for the faithful performance of all other terms, covenants and
conditions of Tenant hereunder. Provided Tenant is not in default
under the Lease at such time, at the expiration of the Second Lease
Year of the Term $28,333.33 of the Deposit shall immediately be
returned to Tenant. The remaining amount of the Deposit shall be
repaid to Tenant at the expiration of the Term if there then shall be
no Event of Default by Tenant and no act, occurrence or circumstance
shall then exist which but for the giving of notice, if required by
this Lease, or the passage of time, shall result in an Event of
Default by Tenant. Upon any Event of Default by Tenant hereunder, all
or part of the Deposit may, at Landlord's sole discretion, be applied
on account of such default, and Tenant shall thereafter within fifteen
(15) days replenish the applied portion of the Deposit then required
to be held.
4. GROSS RENT AND UTILITIES.
-------------------------
4.1 Landlord acknowledges that except for Tenant's obligation to
pay Rent as set forth above, Tenant's Share of the All Risk Premium
(as defined in Section 6.2) and Tenant's Utilities (as defined
2
Exhibit 99.4
herein), Tenant shall not be required to pay Landlord and Landlord
shall be solely responsible for all taxes, assessments, insurance,
operating expenses and other costs and expenses relating to the Land,
Building and/or Premises, except for Tenant's maintenance obligations
expressly set forth in Section 5.5 below. Tenant shall pay for all
Florida Power & Light charges for electricity allocable to the
Premises based upon Tenant's actual consumption ("Tenant's
Utilities").
5. CONDITION OF PREMISES; MAINTENANCE; REPAIR; ALTERATIONS; AND
HAZARDOUS SUBSTANCES AND CONDITION OF PREMISES AT END OF TERM:
--------------------------------------------------------------
5.1 Tenant hereby agrees and acknowledges that the Premises have
been examined by it and that Tenant hereby accepts same in the "AS
IS" condition in which it now exists without any representation or
warranty, express or implied by law by Landlord or its agents.
5.2 Tenant shall not commit or suffer to be committed any waste
in, on or about the Premises. Tenant shall not store any trash,
merchandise, crates, pallets, vehicles, including, but not limited to
inoperable vehicles, recreational vehicles or vehicles without valid
inspection tags, boats, motors or other similar equipment or materials
of any kind outside the Building. All trash shall be kept in metal
containers which are subject to Landlord's approval, which approval
shall not be unreasonably withheld. All trash shall be removed at
reasonable intervals, at Tenant's sole cost and expense.
5.3 Except as otherwise expressly permitted under Section 5.7 of
this Lease, Tenant shall not cut, drill into, disfigure, deface, or
injure any part of the Premises, nor obstruct or permit any
obstruction, alteration, addition, or installation in the Premises
without the prior written consent of Landlord. All alterations,
additions or installations, including but not limited to partitions,
air conditioning ducts or equipment (except movable furniture and
fixtures put in at the expense of Tenant and removable without
defacing or injuring the Building or the Premises), shall become the
property of Landlord at the expiration or any earlier termination of
the Term. All work performed shall be done in a good and workmanlike
manner and with materials of the quality and appearance comparable to
those in the Building. At the expiration of the Lease Term, at
Landlord's election, Tenant shall remove, at Tenant's expense,
Tenant's improvements installed by Tenant after the date hereof.
5.4 Tenant shall, at its sole cost and expense, repair and
replace all damage or injury to the Premises caused by Tenant or its
agents, employees, invitees or licensees.
5.5 Tenant shall, at its sole cost and expense, keep and
maintain all utilities, fixtures, mechanical, electrical and plumbing
systems and equipment located within the Premises only. Landlord
shall, at its sole cost and expense, maintain the roof, foundation,
exterior walls, landscaping, parking areas, utility connections to the
Premises and other areas and systems of the Building. During the
Term, Tenant shall maintain an HVAC service contract for Tenant's HVAC
system, provided that any repairs to Tenant's HVAC system not covered
by such maintenance contract shall be paid for by Landlord. Tenant
shall at its sole cost and expense provide the janitorial services for
the interior of Tenant's Premises only.
5.6 Tenant shall neither cause nor permit: (i) the Premises
to be used to manufacture, process, transport, store, handle, or dispose
of, Hazardous Materials, except in compliance with all applicable
3
Exhibit 99.4
Governmental Requirements, nor (ii) a release of Hazardous Materials
onto the Premises, or any other property as a result of any
intentional or unintentional act or omission on the part of Tenant.
Tenant shall defend, indemnify and hold harmless Landlord, and
Landlord's employees, agents, officers and directors, from and against
any claims, demands, penalties, fines, liabilities, settlements,
damages, costs or expenses of any kind or nature, known or unknown
contingent or otherwise (including, without limitation, attorneys'
fees (including paralegals' and similar persons') at both the trial
and appellate levels, consultant fees, investigation and laboratory
fees, court costs and litigation expenses), arising out of, or in any
way related to Tenant's default under this Section.
5.7 Notwithstanding anything contained in this Lease, Tenant
shall have the right to make, without Landlord's consent, non-
structural alterations to the Premises or changes to or improvements
of the Premises which are not expected to cost in excess of Twenty
Five Thousand Dollars ($25,000) in the aggregate or which do not
constitute material design changes. Tenant's obligation to deliver
the Premises to Landlord at the expiration of the term of this Lease
as set forth in this Lease shall not include: (i) damage caused by
Landlord or its servants or agents, (ii) damage that Landlord or its
servants, Tenants or agents are required to repair, or (iii)
obsolescence, damage from the elements, fire or other casualty.
6. INSURANCE; WAIVER OF SUBROGATION; INDEMNITY.
6.1 Tenant, at its sole cost and expense, shall throughout the
Term procure and maintain:
(a) Comprehensive public liability insurance with
respect to the Premises and Tenant's activities therein and
thereabout, insuring against liability for personal injury or death,
property damage or other loss, with a contractual liability
endorsement to cover the indemnity set forth in Section 6.4 below and
with deductibles of no more than $1,000 and in amounts no less than:
(i) $1,000,000.00 with respect to personal
injury or death to any one person;
(ii) $2,000,000.00 with respect to personal
injury or death arising out of any one (1)
occurrence;
(iii) $100,000.00 with respect to property damage
or other loss arising out of any one (1)
occurrence; and
(b) Worker's Compensation Insurance in at least the
statutorily required amounts.
6.2 Landlord, at its sole cost and expense, shall throughout the
Term procure and maintain all risk hazard insurance (the "All Risk
Coverage") with respect to the Premises in the amount not less than
$1,000,000.00 or the full replacement value, whichever is greater with
a deductible of not more than $10,000.00. Tenant shall pay Landlord
40% of the insurance premium paid by Landlord for the All Risk
Coverage provided that Tenant shall not be responsible for any portion
of such premium not applicable to the Tenant's term under this Lease
and all such insurance premiums shall be reasonable and based upon
customary insurance coverage for similar buildings in the area.
Tenant shall be named as additional insured under Landlord's
4
Exhibit 99.4
insurance, and such insurance shall be primary and non-contributing
with any insurance carried by Tenant. If, on account of the failure
of Tenant to comply with Tenant's insurance requirements, Landlord is
adjudged to be a coinsurer by its insurance carrier, then any loss or
damage Landlord may sustain by reason thereof shall be borne by Tenant
and shall be immediately paid by Tenant upon receipt of a bill
thereof. Tenant's insurance policies shall contain endorsements
requiring thirty (30) days notice to Landlord and Landlord's
mortgagee, if any, prior to any cancellation or any reduction in
amount of coverage. Tenant shall deliver to Landlord as a condition
precedent to its taking occupancy of the Premises (but not to its
obligation to pay Rent), a certificate or certificates evidencing such
insurance acceptable to Landlord, and Tenant shall at least thirty
(30) days prior to the expiration of such policies, deliver to
Landlord certificates of insurance evidencing the renewal of such
policies.
6.3 Tenant and Landlord release each other and waive any right
of recovery against each other for loss or damage to their respective
property, which occurs on or about the Premises (whether due to the
negligence of either party, their agents, employees, licensees,
invitees or otherwise), to the extent that such loss or damage is
reimbursed by insurance proceeds. Tenant and Landlord agree that all
policies of insurance obtained by either of them in connection with
the Premises shall contain appropriate waiver of subrogation clauses.
6.4 Tenant shall indemnify Landlord, its officers, directors and
employees (collectively for the purposes of this Section the
"Landlord") and save them harmless from and against any and all claims
actions, damages, liability and expense in connection with loss of
life, personal injury and or damage to property arising from or out of
the occupancy or use by Tenant of the Premises or any part thereof, or
occasioned wholly or in part by any act or omission of Tenant, its
agents, employees, licensees, invitees, third persons in or about the
Premises.
7. TENANT'S PROPERTY.
7.1 Tenant shall have the right at any time during the term to
repair, alter, move, remove, replace, or improve any of Tenant's
furniture, fixtures, equipment and personal property of any nature
owned by Tenant or located in the Premises, including, without
limitation, art, paintings, sculptures, wall hangings, telephones,
computer systems, cash registers, liquor control systems, ice makers
and similar restaurant and office furniture fixtures and equipment and
personal property of any nature, whether or not affixed to the
Premises and whether or not included in Tenant's work (collectively,
the "Tenant's Property"), provided Tenant promptly repairs and
restores any damage to the Premises caused by Tenant's removal of
same. Provided such items are not purchased with monies from
Landlord, Tenant shall have the right to lease, pledge, encumber and
grant security interests in any and all of Tenant's property and
Landlord's lien on Tenant's Property shall be subordinate to any lien
and security interest in favor of any institutional lender or any
purchase money financing. Unless Tenant is in default under the
Lease, nothing contained in this Section or the Lease shall prohibit
or prevent Tenant from removing any improvements, furniture, fixtures
or equipment installed in the Premises, including, without limitation,
the Tenant's Work, at the termination of this Lease, provided only
that Tenant promptly repair and restore any damage to the premises
caused by Tenant's removal of the same, reasonable wear and tear,
obsolescence and damage from the elements, fire or other casualty,
5
Exhibit 99.4
Landlord's repairs, Tenant's permitted improvements, any alterations
made or damage caused by Landlord or its servants or agents, damage
that Landlord is required to repair, excepted.
8. CONSTRUCTION LIENS.
-------------------
8.1 Tenant shall not suffer or permit the interest of Landlord
in the Premises to be subject to any construction, mechanics' or
materialmen's liens or other liens of any kind.
8.2 Neither Tenant nor anyone claiming by, through or under
Tenant, including but not limited to contractors, subcontractors,
materialmen, mechanics and laborers, shall have any right to file or
place any kind of lien whatsoever upon the Premises or any improvement
thereon, and any such liens are specifically prohibited. Tenant shall
put all parties with whom Tenant may deal on notice that Tenant has no
power to subject Landlord's interest to any claim or lien of any kind
or character, and all such persons so dealing with Tenant must look
solely to the credit of Tenant, and not to Landlord's interest or
assets.
8.3 If at any time a lien or encumbrance is filed against the
Premises as a result of Tenant's work, materials or obligations,
Tenant shall cause same to be removed within thirty (30) days from the
date it is filed.
9. CASUALTY/DAMAGE AND DESTRUCTION:
--------------------------------
9.1 Partial Damage. "Partial Damage" means damage or
destruction to the Building to the extent that the cost of repair is
less than fifty percent (50%) of the fair market value of the Building
immediately prior to such damage or destruction. If at any time
during the Term there is Partial Damage, Landlord may, at Landlord's
option, either (i) repair such damage, in which event this Lease shall
continue in full force and effect, or (ii) give written notice to
Tenant within thirty (30) days after the date of the occurrence of
such damage of Landlord's intention to terminate this Lease, which
termination shall be effective as of the date of the occurrence of
such damage.
9.2 Total Destruction. "Total Destruction" means damage or
destruction to the Building to the extent that the cost of repair is
fifty percent (50%) or more of the fair market value of the Building
immediately prior to such damage or destruction. If at any time
during the Term there is a Total Destruction, Landlord may, at
Landlord's option, either (i) repair such damage within six (6) months
of the date of such damage, in which event this Lease shall continue
in full force and effect, or (ii) if Landlord does not elect to
proceed under Section (i) above either Landlord or Tenant may
terminate this Lease as of the date of such Total Destruction.
9.3 Abatement of Rent. If Landlord repairs or restores the
Premises pursuant to the provisions of this Section, the Rent payable
hereunder for the period during which such damage, repair or
restoration continues shall be abated in proportion to the degree to
which Tenant's use of the Premises is impaired.
10. CONDEMNATION. If all or any part of the Premises shall be
taken under power of eminent domain or like power, or sold under
imminent threat thereof to any public authority or private entity
having such power, this Lease shall terminate as to the part of the
Premises so taken or sold, effective as of the date possession is
required to be delivered to such authority or entity. If a partial
taking or sale of the Premises renders the Building commercially
unviable to either Tenant or Landlord, either party may terminate this
6
Exhibit 99.4
Lease by notice to the other party within thirty (30) days after the
terminating party receives written notice of the portion to be taken
or sold, such termination to be effective sixty (60) days after notice
thereof, or when the portion is taken or sold, whichever is sooner.
All condemnation awards and similar payments shall be paid and belong
to Landlord, except any amounts awarded or paid specifically for
Tenant's trade fixtures and relocation costs.
11. ASSIGNMENT; SUBLETTING; EFFECT OF BANKRUPTCY.
---------------------------------------------
11.1 Tenant shall not, directly or indirectly, assign or sublet
under this Lease or any part thereof, or any rights thereunder, nor
permit all or any part of the Premises to be used or occupied by
another, without first obtaining the written consent of Landlord,
which consent shall not be unreasonably withheld, conditioned or
delayed. Any assignment or subletting made without such Landlord's
consent, shall be voidable by Landlord. Any consent by Landlord,
unless specifically stated therein, shall not relieve Tenant from its
obligations under this Lease. To be effective, any assignment or
sublease must be in writing and signed by the Landlord, Tenant and
assignee/subtenant. The acceptance of Rent from any other person
shall neither be deemed to be a waiver of any of the provisions of
this Lease nor be deemed to be a consent to the assignment of this
Lease or subletting of the Premises. If Landlord shall consent to any
assignment or subletting, the assignee/subtenant shall assume all
obligations of Tenant hereunder and neither Tenant nor any
assignee/subtenant shall be relieved of any liability hereunder if
there should be an Event of Default by assignee/subtenant in the
performance of any of the terms, covenants and conditions hereof.
11.2 Tenant shall not assign, mortgage or encumber this Lease,
nor sublet, nor suffer or permit the Premises or any part thereof to
be used by others, except as set forth in Section 11.1 above;
provided, however, that if this Lease is assigned to any person or
entity pursuant to the provisions of the Bankruptcy Code, 11 U.S.C.
Sec. 101 et seq. (the "Bankruptcy Code"), any and all monies or other
considerations payable or otherwise to be delivered in connection with
such assignment shall be paid or delivered to Landlord, shall be and
remain the exclusive property of Landlord and shall not constitute
property of Tenant or of the estate of Tenant within the meaning of
the Bankruptcy Code. Any and all monies or other considerations
constituting Landlord's property under the preceding sentence not paid
or delivered to Landlord shall be held in trust for the benefit of
Landlord and be promptly paid to or turned over to Landlord.
12. TENANT'S DEFAULT; REMEDIES; RE-ENTRY; HOLDING OVER:
---------------------------------------------------
12.1 The occurrence of any of the following shall constitute an
"Event of Default" of this Lease by Tenant: (i) Tenant shall default
in the payment of any monthly installment of Rent and such default
shall continue for a period of five (5) days after written notice
thereof to Tenant by Landlord; (ii) Tenant shall violate or fail to
perform any of the other terms, covenants or conditions herein made by
Tenant, and such violation or failure shall continue for a period of
thirty (30) days after written notice thereof to Tenant by Landlord
or, if such violation or failure shall reasonably require longer than
thirty (30) days to cure, if Tenant shall fail to commence to cure
same within thirty (30) days after the giving of such notice thereof
and continuously prosecute the curing of the same to completion with
due diligence but in any event such cure must be completed within
sixty (60) days of the giving of such notice; (iii) Tenant shall make
a general assignment for the benefit of its creditors or shall file or
have filed involuntarily against Tenant, a petition for bankruptcy or
other reorganization, liquidation, dissolution or similar relief; (iv)
7
Exhibit 99.4
a proceeding is filed against Tenant seeking any relief mentioned in
(iii) above and said proceeding is not discharged within forty-five
(45) days of the filing thereof; (v) a trustee, receiver or liquidator
shall be appointed for Tenant on a substantial part of its property;
or (vi) Tenant shall mortgage, assign or otherwise encumber its
leasehold interest other than as specifically permitted under this
Lease.
12.2 If an Event of Default by Tenant occurs, the Landlord shall
have all rights and remedies that are available under Florida and
federal law, including, but not limited to, the right to (i) consider
the Lease terminated and take possession of the Premises for the
Landlord's own purposes; (ii) take possession of the Premises for the
Tenant's account and seek general damages; or (iii) accelerate and sue
for the entire balance of the unpaid Rent for the remainder of the
Lease Term which shall then be due and payable. All of the remedies
of the Landlord herein enumerated shall be cumulative and none shall
exclude any other rights or remedies allowed by law or in equity.
12.3 Upon the occurrence of an act or event which but for the
passage of time would result in an Event of Default by Tenant after
notice to Tenant and upon an Event of Default by Tenant, Landlord may,
but shall not be obligated to, without waiving, or releasing Tenant
from any obligation under this Lease, make such payment or perform
such other act to the extent Landlord, in its sole discretion, may
deem desirable, and in connection therewith, to pay expenses and
employ counsel. All sums so paid by Landlord and all expenses in
connection therewith, together with interest thereon at 14% from the
date of payment, shall be deemed Rent hereunder and payable at the
time of the next installment of Rent thereafter becoming due and
Landlord shall have the same rights and remedies for the non-payment
thereof, or of any other Additional Rent, as in the case of default in
the payment of Rent.
12.4 If Tenant shall hold over after the expiration of the Term,
at Landlord's option, Tenant may be deemed to be occupying the
Premises as a tenant from month to month, which tenancy may be
terminated by seven (7) days notice. During such tenancy, Tenant
agrees to pay to Landlord, monthly in advance, Rent in an amount equal
to one hundred fifty percent (150%) of the monthly installment of Rent
which was payable on the last day of the Term, unless a different rate
is agreed upon in writing, and to be bound by all of the terms,
covenants and conditions herein specified. If Landlord relets the
Premises (or any portion(s) thereof) to a new tenant and the term of
such new lease commences during the period for which Tenant holds
over, Landlord shall be entitled to recover from Tenant any and all
costs, legal expenses, attorney's fees, damages, loss of profits or
any other expenses incurred by Landlord as a result of Tenant's
failure or inability to deliver possession of the Premises to Landlord
when required under this Lease.
13. QUIET ENJOYMENT; LANDLORD'S DEFAULT; LIMITATION OF
LANDLORD'S LIABILITY.
--------------------------------------------------
13.1 If and so long as Tenant pays all Rent and keeps and
performs each and every term, covenant and condition herein contained
on the part of Tenant to be kept and performed, Tenant shall quietly
enjoy the Premises without hindrance by Landlord.
13.2 Landlord shall not be in default in the performance of any
obligation required to be performed by Landlord under this Lease
unless Landlord has failed to perform such obligations within thirty
(30) days after the receipt of notice from Tenant specifying in detail
Landlord's failure to perform; provided, however, that if the nature
8
Exhibit 99.4
of Landlord's obligation is such that more than thirty (30) days are
required for its performance, then Landlord shall not be deemed in
default if it shall commence such performance within such ten day
period and thereafter diligently pursues the same to completion within
sixty (60) days. Upon any such default by Landlord ("Default by
Landlord"), Tenant may exercise any of its rights provided in law or
at equity and shall have the right, but not the obligation, to cure
any such Default by Landlord and to deduct the costs incurred by
Tenant to cure such default, including reasonable legal fees and
expenses, from the amounts next due and owing under the Lease.
13.3 Landlord acknowledges that Landlord is entering into this
Lease based solely upon the credit of Tenant and not its principals,
beneficiaries, shareholders, partners (general and limited, and the
general and limited partners of such limited partners), officers,
members or directors, past, present or future, for the payment of the
rent, additional rent, or the payment of any other sums due under this
Lease or the performance of any of Tenant's obligations under this
Lease. Accordingly, Landlord's rights and remedies for any defaults
of Tenant under this Lease are limited to pursuing Tenant and no
member, shareholder, officer or director of Tenant, past, present or
future, shall be liable to Landlord for any such defaults. Any
judgment obtained by Landlord as a result of such defaults by Tenant
may only be satisfied out of the assets of Tenant and Landlord may not
satisfy any such judgment out of the assets of any shareholder,
officer or director of Tenant, past, present or future.
13.4 The obligations of Landlord under this Lease do not
constitute personal obligations of Landlord or the individual
partners, shareholders, directors, and officers, and Tenant shall look
solely to Landlord's then existing interest in the Building, and to no
other assets of Landlord, for satisfaction of any liability in respect
of this Lease, and will not seek recourse against the individual
partners, shareholders, directors, officers, or any of their personal
assets for such satisfaction. No other properties or assets of
Landlord shall be subject to levy, execution, or other enforcement
procedures for the satisfaction of any judgment (or other judicial
process) or for the satisfaction of any other remedy of Tenant arising
out of or in connection with this Lease, the relationship of landlord
and tenant, or Tenant's use of the Premises.
14. AMENDMENT; WAIVER; APPROVAL; CONSENT. This Lease
constitutes the entire agreement between the parties. This Lease
shall not be amended or modified except in writing signed by both
parties. Failure of Landlord to exercise any of its rights in one or
more instances shall not be construed as a waiver of Landlord's right
to strict performance of such rights or as to any subsequent breach of
any such rights. Wherever this Lease requires either the Landlord's
consent or approval, such consent or approval shall only be deemed
given when in writing and, unless set forth expressly to the contrary,
such consent or approval shall be in the sole discretion of Landlord.
15. NOTICES. All notices, communications and statements
required or permitted under this Lease shall be in writing, delivered
in person or sent by United States Registered or Certified Mail,
return receipt requested, with postage prepaid, or Express Mail or
Federal Express (or other similar courier service having a delivery
system which provides for or makes available a signed receipt of
delivery) or by facsimile transmission (provided an original copy is
thereafter provided in the manner stated in this Section below)
addressed to the parties as follows:
9
Exhibit 99.4
AS TO TENANT: WITH A COPY TO:
PetMed Express, Inc. Stearns Weaver Miller Weissler
1441 S.W. 29th Avenue Alhadeff & Sitterson, P.A.
Pompano Beach, Florida 33069 200 East Broward Blvd., #1900
Attn: John Vermaaten Ft. Lauderdale, Florida 33301
Fax (954)971-0544 Attn: Peter L. Desiderio, Esq.
Fax (954)462-9567
AS TO LANDLORD: WITH A COPY TO:
c/o RMS Properties, Inc. Dowd, Dowd & Mertes, Ltd.
331 B West Golf Road 701 Lee Street, Suite 790
Schaumburg, Illinois 60195 Des Plaines, Illinois 60016
Attn: Roshan Shoffet, Pres. Attn: Drake D. Mertes, Esq.
Fax (847)310-0906 Fax (847)390-7643
Mail service shall be deemed effective upon the earlier of either
seventy-two (72) hours after deposit in the U.S. mail in accordance
herewith or upon receipt or refusal to accept receipt by a reputable
courier service. Notices sent by facsimile transmission which are
received by 4:00 p.m. (in the addressee's time zone) shall be deemed
delivered as of the date of such transmission, provided that an
original copy of such transmission is delivered to the addressee by a
nationally utilized overnight courier service on the day following
such transmission. Either party by written notice to the other may
designate additional parties to receive copies of notices sent to it.
Such designees may be changed by written notice. Either party may at
any time, in the manner set forth for giving notice to the other,
designate a different address to which notices, communication and
statements to it shall be sent.
16. LANDLORD'S RESERVED RIGHTS; ACCESS; EASEMENTS:
----------------------------------------------
16.1 Landlord shall have the right to (i) sell the Premises (or
any portion(s) thereof) and assign this Lease, the Deposit and Prepaid
Rent to the purchaser, and upon such assignment Landlord shall be
released from all of its obligations under this Lease and Tenant
agrees to attorn to such purchaser, or any other successor or assign
of Landlord through foreclosure or deed in lieu of foreclosure or
otherwise, and to recognize such person as successor Landlord under
this Lease; and (ii) change the name or street address of the
Premises.
16.2 Tenant shall permit Landlord to enter the Premises at all
reasonable times for the purposes of inspecting, and repairing the
Premises and of ascertaining compliance by Tenant with the provisions
of this Lease. Landlord shall use reasonable efforts so as to minimize
any inconvenience to or disruption of Tenant. Landlord may show the
Premises to prospective purchasers, mortgagees, or tenants at any
time. If representatives of Tenant shall not be present to open and
permit entry into the Premises at anytime when such entry by Landlord
is necessary due to an emergency, Landlord, or its employees or agents
may enter by means of a master key, without liability of Landlord to
Tenant and without such entry constituting an eviction of Tenant, and
without incurring liability for trespass or causing a termination of
this Lease.
17. SUBORDINATION; ESTOPPEL CERTIFICATE.
------------------------------------
17.1 Subject to Tenant's receipt of the Non-Disturbance Agreement
(as hereinafter defined), the rights of Tenant hereunder are and shall
be, at the election of any mortgagee, subject and subordinate to the
lien of any mortgage or mortgages, or the lien resulting from any
other method of financing or refinancing, now or hereafter in force
10
Exhibit 99.4
against the Premises (or any portion(s) thereof), and to all advances
made or hereafter to be made upon the security thereof ("Superior
Instruments"). Tenant agrees upon request of Landlord, from time to
time, to execute whatever documentation may be required to further
effect the provisions of this Section. Notwithstanding the foregoing,
Tenant shall not subordinate its leasehold interest to any
Overlandlord (as hereinafter defined) unless prior to the commencement
of the Lease term, Landlord at its sole cost and expense will provide
Tenant with commercially reasonable non-disturbance agreements in
favor of Tenant from all mortgagees, ground landlords and/or lien
holders (collectively, "Overlandlords"). Landlord also agrees to
provide Tenant with commercially reasonable non-disturbance
agreement(s) in favor of Tenant from any future Overlandlords in
consideration of, and as a condition precedent to, Tenant's agreement
to be bound by any subordination, attornment or other similar
provisions of the Lease. In no event shall any subordination or
attornment expand beyond those set forth in this Lease the rights and
remedies available to any such Overlandlord, the rights and remedies
available to such party as against Tenant (including the imposition of
additional or larger cure rights for such parties) or impose any
additional burdens or requirements on Tenant. Neither Tenant nor any
party claiming by, through or under Tenant shall be named or joined as
a party defendant in any action or proceeding which may be instituted
by any such Overlandlord against Landlord to foreclose or enforce any
interest or lien held by such Overlandlord.
17.2 Landlord and Tenant shall, each without charge at any time
and from time to time, within ten (10) days after request by the other
party, certify by written instrument, duly executed, acknowledged and
delivered to any ground lessor, Mortgagee, assignee of any Mortgagee
or purchaser, or any proposed Mortgagee, or proposed assignee or sub-
tenant of Tenant or any other person, firm or corporation specified by
Landlord or Tenant:
(a) That this Lease is unmodified and in full force
and effect (or, if there has been modification, that the same is in full
force and effect as modified and stating the modifications);
(b) Whether or not there are then existing any breaches
or defaults by the other party under any of the terms of this Lease and
specifying such breach or default or any setoffs or defenses against
the enforcement of any of the agreements, terms, covenants or
conditions of this Lease upon the part of the Landlord or Tenant, as
the case may be, to be performed or complied with (and, if so,
specifying the same and the steps being taken to remedy the same); and
(c) The dates, if any, to which the rental(s) and other
charges under this Lease have been paid in advance.
18. ACCORD AND SATISFACTION. No receipt and retention by
Landlord of any payment tendered by Tenant in connection with this
Lease shall give rise to or support or constitute an accord or
satisfaction, or a compromise or other settlement, notwithstanding any
accompanying statement, instruction or other assertion to the contrary
(whether by notation on a check or in a transmittal letter or
otherwise), unless Landlord expressly agrees to an accord and
satisfaction, or a compromise or other settlement, in a separate
writing duly executed by Landlord. Landlord may receive and retain,
absolutely and for itself, any and all payments so tendered,
notwithstanding any accompanying instructions by Tenant to the
contrary. Landlord will be entitled to treat any such payments as
being received on account of any item or items of Rent, interest,
11
Exhibit 99.4
expense or damage due in connection therewith, in such amounts and in
such order as Landlord may determine in its sole discretion.
19. SEVERABILITY. The parties intend this Lease to be legally
valid and enforceable in accordance with all of its terms, covenants
and conditions to the fullest extent permitted by law. If any term,
covenant or condition hereof shall be invalid or unenforceable, the
parties agree that such term, covenant or condition shall be stricken
from this Lease, the same as if it never had been contained herein.
Such invalidity or unenforceability shall not extend to any other
term, covenant or condition of this Lease, and the remaining terms,
covenants or conditions hereof shall continue in effect to the fullest
extent permitted by law, the same as if such stricken term, covenant
and condition never had been contained herein.
20. TIME. Time is of the essence of this Lease and applies to
all terms, covenants, and conditions contained herein. All "days" set
forth in this Lease shall be deemed to be "calendar days" unless
specifically stated to the contrary.
21. SUCCESSORS AND ASSIGNS. All terms, conditions to be
observed and performed by Tenant hereunder shall be applicable to and
binding upon each parties' respective heirs, administrators,
executors, and permitted successors and assigns.
22. RELATIONSHIP OF PARTIES. Anything in this Lease to the
contrary notwithstanding, it is agreed that Landlord shall in no event
be deemed to be a partner or engaged in a joint venture with, or an
associate of Tenant in the conduct of its business nor shall Landlord
be liable for any debts incurred by Tenant in the conduct of its
business. Nothing contained in this Lease shall be deemed or
construed to confer upon Landlord any interest in the business of the
Tenant. The relationship of the parties during the Term shall at all
times be that of landlord and tenant.
23. CAPTIONS AND SECTION NUMBERS. The captions and section
numbers are for convenience of reference only and in no way shall be
used to construe or modify the provisions set forth in this Lease. It
is understood and agreed that verbs and pronouns in the singular
number are uniformly used throughout this Lease regardless of gender,
number of the parties hereto.
24. SCHEDULES; EXHIBITS. All schedules, exhibits and
typewritten riders, if any, attached or added hereto are made a part
of this Lease by reference and the terms, covenants, and conditions
thereof shall control over any inconsistent provisions in the Sections
of this Lease.
25. BROKERAGE: Tenant represents that it has dealt with no
broker, salesman, agent or other person in connection with this
transaction and that no broker, salesman, agent or other person
brought about this transaction. Tenant agrees to indemnify and hold
Landlord harmless from and against any claims by any other broker,
salesman, agent or other person claiming a commission or other form of
compensation by virtue of having dealt with Tenant with regard to this
leasing transaction. Landlord agrees to indemnify and hold Landlord
harmless from and against any claims by any other broker, salesman,
agent or other person claiming a commission or other form of
compensation by virtue of having dealt with Landlord with regard to
this leasing transaction. The provisions of this subsection shall
survive the expiration or sooner termination of this Lease.
12
Exhibit 99.4
26. AUTHORITY. If Tenant signs as a corporation, partnership,
or other entity, each of the persons executing this Lease, on behalf
of Tenant, does hereby covenant and warrant that Tenant is duly
authorized to transact business, is in good standing and existing,
that Tenant is qualified to do business in the State of Florida,
Tenant has full right and authority to enter into this Lease, and that
the persons signing on behalf of Tenant were authorized to do so. If
Landlord signs as a corporation, partnership, or other entity, each of
the persons executing this Lease, on behalf of Landlord, does hereby
covenant and warrant that Landlord is duly authorized to transact
business, is in good standing and existing, that Landlord is qualified
to do business in the State of Florida, Landlord has full right and
authority to enter into this Lease, and that the persons signing on
behalf of Landlord were authorized to do so.
27. APPLICABLE LAW. This Lease shall be construed according to
the laws of the State of Florida. Should any provision of this Lease
require judicial interpretation, it is agreed by the parties hereto
that the court interpreting or construing the same shall not apply a
presumption that any such provision shall be more strictly construed
against the party who itself or through its agent prepared the same,
as all parties have participated in the preparation of the provisions
of this Lease and that all terms, covenants and conditions were
negotiable.
28. ATTORNEYS' FEES: If either party defaults in the performance of
any of the terms or provisions of this Lease and by reason thereof the
other party employs the services of any attorney to enforce
performance of the covenants, or to perform any service based upon
defaults, then in any of said events the prevailing party shall be
entitled to receive from the other party reasonable attorneys' fees
and all expenses and costs incurred by the prevailing party pertaining
thereto (including costs and fees relating to any appeal) and in
enforcement of any remedy.
29. TENDER AND DELIVERY OF LEASE. Submission of this Lease does
not constitute an offer, right of first refusal, reservation of or
option for the Premises or any part thereof. This Lease becomes
effective as a lease upon execution and delivery by both Landlord and
Tenant.
30. RADON GAS. Radon is a naturally occurring radioactive gas
that, when it has accumulated in a building in sufficient quantities,
may present health risks to persons who are exposed to it over time.
Levels of radon that exceed federal and state guidelines have been
found in buildings in Florida. Additional information regarding radon
and radon testing may be obtained from your county public health unit.
31. OPTION TO SHORTEN TERM. At any time after the Commencement
Date, Tenant may, by written notice delivered to Landlord at least one
hundred twenty (120) days prior to the date Tenant elects to terminate
this Lease (the "Tenant's Termination Date") elect to terminate this
Lease as of the Tenant's Termination Date at no additional cost or
expense to the Tenant, in which event the Term of this Lease shall
expire on the Termination Date. At any time after March 1, 2003,
Landlord may, by written notice delivered to Tenant, at least ninety
(90) days prior to the date Landlord elects to terminate the Lease
(the "Landlord's Termination Date") elect to terminate this Lease
prior to the expiration of the Lease Term at no additional cost or
expense to the Landlord, in which event the Term of the Lease shall
expire on Landlord's Termination Date and Rent shall be payable only
to such Landlord's Termination Date. Notwithstanding the foregoing,
13
Exhibit 99.4
in no event shall Landlord's Termination Date be effective prior to
March 1, 2003.
32. RENT ABATEMENT: In the event that Tenant is prevented from
using, and does not use, the Premises or the parking spaces required
to be made available to Tenant under the Lease ("Tenant's Parking
Spaces) or any portion thereof, for two (2) consecutive days or five
(5) days in any twelve (12) month period (the "Eligibility Period") as
a result of any damage, or destruction to the Premises, or any
construction by Landlord or its contractors, subcontractors, employees
or agents then Tenant's rent shall be abated or reduced, as the case
may be, after expiration of the Eligibility Period for such time that
Tenant continues to be so prevented from using the Premises or
Tenant's Parking Spaces or a portion thereof for its business
purposes, in the proportion that the rentable area of the portion of
the Premises that Tenant is prevented from using bears to the total
rentable area of the Premises, provided that if Tenant's access to or
use of Tenant's Parking Spaces is impaired rent shall also be reduced,
as reasonably determined by an architect selected by Tenant, in order
to compensate Tenant for such temporary loss of parking. However, in
the event that Tenant is prevented from conducting, and does not
conduct, its business in any portion of the Premises for a period of
time in excess of the Eligibility Period, and the remaining portion of
the Premises is not sufficient to allow Tenant to effectively conduct
its business therein, and if Tenant does not conduct its business from
such remaining portion, then for such time after expiration of the
Eligibility Period during which Tenant is so prevented from
effectively conducting its business therein, the rent for the entire
Premises shall be abated, provided, however, if Tenant reoccupies and
conducts its business from any portion of the Premises during such
period, the rent allocable to such reoccupied portion, based on the
proportion that the rentable area of such reoccupied portion of the
Premises bears to total rentable area of the Premises shall be payable
by Tenant from the date such business operations commence. If
Tenant's right to abatement occurs because of an eminent domain taking
and/or because of damage or destruction to the Premises or Tenant's
property, Tenant's abatement period shall continue until Tenant has
been given sufficient time, and sufficient access to the Premises, to
rebuild the portion of the Premises it is required to rebuild, to
install its property, furniture, fixtures, and equipment and to move
in.
(Signatures Appear on Following Page)
14
IN WITNESS WHEREOF, the respective parties have signed, sealed
and delivered this Lease on the date and year written below.
WITNESSES: LANDLORD:
RMS PROPERTIES II, L.L.C., an
Illinois limited liability
company,
/S/ Michael Rauch
- -------------------------
Print: Michael Rauch By: RMS PROPERTIES, INC.,
an Illinois corporation
/S/ Mendo Akdag By: /S/ Ron Shoffet
- ------------------------- -----------------------------
Print: Mendo Akdag Print: Ron Shoffet
Title: President
Dated: 5/31/2001
WITNESSES: TENANT:
PETMED EXPRESS, INC., a Florida
corporation
/S/ Melissa Licata
- -------------------------
Print: Melissa Licata
/S/ Mendo Akdag By: /S/ Marc Puleo
- ------------------------- -----------------------------
Print: Mendo Akdag Print: Marc Puleo
Title: President
Dated: 5/31/2001
-14-
Exhibit 99.4