Exhibit 10.27
08/06/96 12/01/92
08/28/96
09/09/96
LEASE
THIS INDENTURE of lease, dated as of the 30th day of September, 1996, by
and between OPUS SOUTHWEST CORPORATION, a Minnesota corporation, owner of the
Complex (as hereinafter defined), hereinafter referred to as "Lessor", and P.J.
FOOD SERVICE, INC., a Kentucky corporation, hereinafter referred to as "Lessee".
WITNESSETH:
That Lessor, in consideration of the rents and covenants hereinafter set
forth, does hereby lease and let unto Lessee, and Lessee does hereby hire and
take from Lessor, that certain space shown and designated on the site plan
attached hereto and made a part hereof as Exhibit A (the "Site Plan"), which
space consists of approximately 25,436 square feet, located in the office and
warehouse complex known and described as Kyrene Business Park located north of
the northwest corner of Kyrene Road and Elliot Road, Tempe, Arizona, and the
Premises is located at 7350 South Kyrene Road, Tempe, Arizona 85283. The
aforesaid space leased and let unto Lessee is hereinafter referred to as the
"Premises"; the land (including all easement areas appurtenant thereto) upon
which the building or buildings of which the Premises are a part is herein-
after referred to as the "Property"; and the Property and all buildings and
improvements and personal property of Lessor used in connection with the
operation or maintenance thereof located therein and thereon and the appur-
tenant parking facilities, if any, are hereinafter called the "Complex".
Lessee hereby accepts this Lease and the Premises upon the covenants and
conditions set forth herein and subject to any encumbrances, covenants,
conditions, restrictions and other matters of record and all applicable zoning,
municipal, county, state and federal laws, ordinances and regulations governing
and regulating the use of the Premises.
TO HAVE AND TO HOLD THE SAME PREMISES, without any liability or obligation
on the part of Lessor to make any alterations, improvements or repairs of any
kind on or about the Premises, except as expressly provided herein, for a term
of five (5) years, commencing on the first (1st) day of December, 1996, and
ending on the thirtieth (30th) day of November, 2001, unless sooner terminated
in the manner provided hereinafter, to be occupied and used by Lessee for
general warehouse purposes, including receiving, ordering, production, shipping,
selling and billing of products, materials and merchandise made or distributed
by Lessee, its parent, affiliates or subsidiaries, and for no other purpose,
subject to the covenants and agreements hereinafter contained.
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ARTICLE I. BASE RENT: In consideration of the leasing aforesaid, Lessee agrees
to pay to Lessor, at c/o Normandale Properties Southwest Corporation, 4742 North
24th Street, Suite 100, Phoenix, Arizona 85016, Attention: Accounting Department
or at such other place as Lessor from time to time may designate in writing, an
annual rental as hereinafter set forth, sometimes hereinafter referred to as the
"Base Rent", payable monthly, in advance, in installments as hereinafter set
forth, commencing on the first day of the term and continuing on the first day
of each and every month thereafter for the next succeeding months during the
balance of the term:
APPLICABLE PORTION MONTHLY
OF TERM BASE RENT
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Months 01-60 $ 8,139.52
If the term commences on a date other than the first day of a calendar
month or ends on a date other than the last day of a calendar month, monthly
rent for the first month of the term or the last month of the term, as the case
may be, shall be prorated based upon the ratio that the number of days in the
term within such month bears to the total number of days in such month.
ARTICLE II. ADDITIONAL RENT: In addition to the Base Rent payable by Lessee
under the provisions of Article I hereof, Lessee shall pay to Lessor "Additional
Rent" as hereinafter provided for in this Article II. All sums under this
Article II and all other sums and charges required to be paid by Lessee under
this Lease (except Base Rent), however denoted, shall be deemed to be
"Additional Rent". If any such amounts or charges are not paid at the time
provided in this Lease, they shall nevertheless be collectible as Additional
Rent with the next installment of Base Rent falling due.
For purposes of this Article II, the parties hereto agree upon the
following Definitions:
A. The term "Lease Year" shall mean each of those calendar years
commencing with and including the year during which the term of this
Lease commences, and ending with the calendar year during which the
term of this Lease (including any extensions or renewals)
terminates.
B. The term "Real Estate Taxes" shall mean and include all personal
property taxes of Lessor relating to Lessor's personal property
located in the Complex and used or useful in connection with the
operation and maintenance thereof, real estate taxes and
installments of special assessments, including interest thereon,
relating to the Property and the Complex, and all other governmental
charges, general and special, ordinary and extraordinary, foreseen
as well as unforeseen, of any kind and nature whatsoever, or other
tax, however described, which is levied or assessed by the United
States of America or the state in which the Complex is located or
any political subdivision thereof, against Lessor or all or any part
of the Complex as a result of Lessor's ownership of the
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Property or the Complex, and payable during the respective Lease
Year. The term "Real Estate Taxes" shall also include any
assessments or other charges imposed against Lessor or all or any
part of the Complex and payable during the respective Lease Year
as a result of the Complex being subject to any covenants,
conditions or restrictions now or hereafter recorded, as the same
may be amended from time to time. It shall not include any net
income tax, estate tax or inheritance tax. Nothwithstanding
anything to the contrary contained herein, the term "Real Estate
Taxes" shall not include personal property taxes of Lessor relating
to any of Lessor's personal property to the extent that such
personal property is used or useful in connection with the operation
and maintenance of future phases of Lessor's proposed development of
the real property adjacent to the Complex. In addition, "Real
Estate Taxes" shall not include any special assessments or other
charges imposed against Lessor as a result of the development of
future phases of Lessor's proposed development of the real property
adjacent to the Complex, including, without limitation, Phase II or
Phase III (as hereinafter defined).
C. The term "Operating Expenses" shall mean and include all expenses
incurred with respect to the maintenance and operation of the
Property and the Complex as determined in accordance with generally
accepted accounting principles consistently followed, including, but
not limited to, insurance premiums (including insurance premiums for
rent insurance), maintenance and repair costs, steam, electricity,
water, sewer, gas and other utility charges (if any), fuel for
maintenance vehicles, lighting, window washing and janitorial
services for the common areas, trash and rubbish removal (excluding
removal of garbage generated by tenants of the Complex), wages
payable to employees of Lessor whose duties are directly connected
with the operation and maintenance of the Property and the Complex
(but only for the portion of their time allocable to work related to
the Complex), amounts paid to contractors or subcontractors for work
or services performed in connection with the operation and
maintenance of the Property and the Complex, all costs of uniforms,
supplies and materials used in connection with the operation and
maintenance of the Property and the Complex, all payroll taxes,
unemployment insurance costs, vacation allowances and the cost of
providing disability insurance or benefits, pensions, profit sharing
benefits, hospitalization, retirement or other so-called fringe
benefits, and any other expense imposed on Lessor or its contractors
or subcontractors, pursuant to law or pursuant to any collective
bargaining agreement covering such employees, all services,
supplies, repairs, replacements (except those of a capital nature)
or other expenses for maintaining and operating the Complex,
reasonable attorneys' fees and costs in connection with appeal or
contest of real estate or other taxes or levies, and such other
expenses as may be ordinarily
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incurred in the operation and maintenance of a warehouse complex and
not specifically set forth herein, including reasonable management
fee not to exceed three percent (3%) of annual gross receipts
received from the operation of the Complex. The term "Operating
Expenses" shall not include any capital improvement to the Complex
other than replacements required for normal maintenance and repair,
nor shall it include repairs, restoration or other work occasioned
by fire, windstorm or other insured casualty, expenses incurred in
leasing or procuring tenants for the Complex or for Phase II or
Phase III (as defined in Article XXVI), leasing commissions,
advertising and marketing expenses, expenses for renovating space
for new tenants, legal expenses incident to enforcement by Lessor of
the terms of any lease, interest or principal payments on any
mortgage or other indebtedness of Lessor, compensation paid to any
employee of Lessor above the grade of building superintendent,
depreciation allowance or expense. Notwithstanding the foregoing,
in the event Lessor installs equipment in or makes improvements or
alterations to the Complex which are for the purpose of reducing
energy costs, maintenance costs or other Operating Expenses or which
are required under any governmental laws, regulations or ordinances
which were not required at the date of commencement of the term of
this Lease, Lessor may include in Operating Expenses reasonable
charges for interest on such investment and reasonable charges for
depreciation on the same so as to amortize such investment over the
reasonable life of such equipment, improvement or alteration on a
straight line basis. Operating Expenses shall also be deemed to
include expenses incurred by Lessor in connection with city
sidewalks adjacent to the Property or other public facility to which
Lessor or the Complex is from time to time subject in connection
with operations of the Property and the Complex, only to the extent
such other public facility benefits Phase I (as depicted on the Site
Plan).
D. The term "Lessee's Pro Rata Share of Real Estate Taxes" shall mean
twenty-five and fifty-nine one hundredths percent (25.59%) of the
Real Estate Taxes for the applicable Lease Year, and the term
"Lessee's Pro Rata Share of Operating Expenses" shall mean twenty-
five and fifty-nine one hundredths percent (25.59%) of the Operating
Expenses for the applicable Lease Year. Said percentages have been
agreed upon by the parties hereto after due consideration of the
rentable area of the Premises compared to the rentable area of the
Complex.
As to each Lease Year after the term of this Lease commences, Lessor shall
estimate and provide Lessee with a detailed cost projection in writing for each
such Lease Year (i) the total amount of Real Estate Taxes; (ii) the total amount
of Operating Expenses; (iii) Lessee's Pro Rata Share of Real Estate Taxes; (iv)
Lessee's Pro Rata Share of Operating Expenses; (v) the computation of the annual
and monthly rental payable during such Lease Year as a result of increases or
decreases in Lessee's Pro Rata Share of Real
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Estate Taxes and Lessee's Pro Rata Share of Operating Expenses. Said estimate
shall be in writing and shall be delivered or mailed to Lessee at the Premises.
Lessee shall pay, as Additional Rent, the amount of Lessee's Pro Rata
Share of Real Estate Taxes for each Lease Year and Lessee's Pro Rata Share of
Operating Expenses for each Lease Year, so estimated, in equal monthly
installments, in advance, on the first day of each month during each applicable
Lease Year. In the event that said estimate is delivered to Lessee after the
first day of January of the applicable Lease Year, said amount, so estimated,
shall be payable as Additional Rent, in equal monthly installments, in advance,
on the first day of each month over the balance of such Lease Year, with the
number of installments being equal to the number of full calendar months
remaining in such Lease Year.
Not more than once during any applicable Lease Year, Lessor may re-
estimate the amount of Real Estate Taxes and Operating Expenses and Lessee's Pro
Rata Share thereof, and in such event Lessor shall notify Lessee, in writing, of
such re-estimate and the reasons for such re-estimate in the manner above set
forth and fix monthly installments for the then remaining balance of such Lease
Year in an amount sufficient to pay the re-estimated amount over the balance of
such Lease Year after giving credit for payments made by Lessee on the previous
estimate.
Upon completion of each Lease Year, Lessor shall cause its accountants to
determine the actual amount of Real Estate Taxes and Operating Expenses for such
Lease Year and Lessee's Pro Rata Share thereof and deliver a written
certification of the amounts thereof to Lessee after the end of each Lease Year.
If Lessee has paid less than its Pro Rata Share of Real Estate Taxes or its Pro
Rata Share of Operating Expenses for any Lease Year, Lessee shall pay the
balance of its Pro Rata Share of the same within ten (10) days after the receipt
of such statement. If Lessee has paid more than its Pro Rata Share of Real
Estate Taxes or its Pro Rata Share of Operating Expenses for any Lease Year,
Lessor shall, at Lessee's option, either (i) refund such excess, or (ii) credit
such excess against the most current monthly installment or installments due
Lessor for its estimate of Lessee's Pro Rata Share of Real Estate Taxes and
Lessee's Pro Rata Share of Operating Expenses for the next following Lease Year.
A pro rata adjustment shall be made for a fractional Lease Year occurring during
the term of this Lease or any renewal or extension thereof based upon the number
of days of the term of this Lease during said Lease Year as compared to three
hundred sixty-five (365) days and all additional sums payable by Lessee or
credits due Lessee as a result of the provisions of this Article II shall be
adjusted accordingly.
Further, Lessee shall pay, also as Additional Rent, all other sums and
charges required to be paid by Lessee under this Lease, and any tax or excise on
rents, gross receipts tax, transaction privilege tax or other tax, however
described, which is levied or assessed by the United States of America or the
state in which the Complex is located or any political subdivision thereof, or
any city or municipality, against Lessor in respect to the Base Rent, Additional
Rent, or other charges reserved under this Lease or as
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a result of Lessor's receipt of such rents or other charges accruing under this
Lease; provided, however, Lessee shall have no obligation to pay net income
taxes of Lessor.
ARTICLE III. LATE CHARGE AND OVERDUE AMOUNTS - RENT INDEPENDENT: Lessee shall
pay to Lessor, as liquidated damages, a late charge equal to five percent (5%)
of any amount not paid on the date when the same is due to compensate Lessor for
its costs in connection with such late payment by Lessee. The assessment or
collection of a late charge hereunder shall not constitute the waiver by Lessor
of a default by Lessee under this Lease and shall not bar the exercise by Lessor
of any rights or remedies available under this Lease. In addition, any
installment of Base Rent, Additional Rent or other charges to be paid by Lessee
accruing under the provisions of this Lease, which shall not be paid when due,
shall bear interest at the rate of eighteen percent (18%) per annum from the
date when the same is due until the same shall be paid, but if such rate exceeds
the maximum interest rate permitted by law, such rate shall be reduced to the
highest rate allowed by law under the circumstances. Lessee's covenants to pay
the Base Rent and the Additional Rent are independent of any other covenant,
condition, provision or agreement herein contained. Nothing herein contained
shall be deemed to suspend or delay the payment of any amount of money or charge
at the time the same becomes due and payable hereunder, or limit any other
remedy of Lessor. Base Rent and Additional Rent are sometimes collectively
referred to as "rent". Except as may specifically be set forth to the contrary
elsewhere herein, rent shall be payable without deduction, offset, prior notice
or demand, in lawful money of the United States.
ARTICLE IV. POSSESSION OF PREMISES: If Lessor shall be unable to give
possession of the Premises on the date of the commencement of the term because
the construction of the Complex or the completion of the Premises has not been
sufficiently completed to make the Premises ready for occupancy, or for any
other reason, Lessor shall not be subject to any claims, damages or liabilities
for the failure to give possession on said date. Under said circumstances, the
rent reserved and covenant to pay same shall not commence until possession of
the Premises is given or the Premises are ready for occupancy, whichever is
earlier, and, subject to the preceding sentence, failure to give possession on
the date of commencement of the term shall in no way affect the validity of this
Lease or the obligations of Lessee hereunder; provided, however, that if the
date of commencement of the initial term is delayed beyond the scheduled
commencement date, the expiration date of the initial term shall be extended to
provide for a full five-year initial term of this Lease. If Lessee is given and
accepts possession of the Premises on a date earlier than the date above
specified for commencement of the term, the rent reserved herein and all
covenants, agreements and obligations herein and the term of this Lease shall
commence on the date that possession of the Premises is given to Lessee.
The acceptance of possession by Lessee shall be deemed conclusively to
establish that the Premises and all other improvements of the Complex required
to be constructed by Lessor for use thereof by Lessee hereunder have been
completed at such time to Lessee's
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satisfaction and in conformity with the provisions of this Lease in all respects
unless Lessee notifies Lessor in writing within sixty (60) days after
commencement of the term as to any items not completed. Lessee waives any claim
as to matters not listed in said notice. Lessee acknowledges that neither
Lessor nor any agent of Lessor has made any representation or warranty with
respect to the Premises or the Complex or with respect to the suitability or
fitness of either for the conduct of Lessee's business or for any other purpose.
ARTICLE V. SERVICES:
A. All electric lighting bulbs and tubes and all ballasts and starters
within the Premises shall be replaced by Lessee at the expense of
Lessee.
B. Subject to Article II hereof, Lessor shall provide maintenance in
good order, condition and repair of the parking facilities and all
driveways leading thereto and keeping the same free from any
unreasonable accumulation of snow. Lessor shall keep and maintain
the landscaped area and parking facilities in a neat and orderly
condition. Lessor reserves the right to designate areas of the
appurtenant parking facilities where Lessee and its agents,
employees and invitees shall park and may exclude Lessee, its
agents, employees and invitees from parking in other areas as
designated by Lessor; provided, however, Lessor shall not be liable
to Lessee for the failure of any tenant or its invitees, employees,
agents or customers to abide by Lessor's designations or
restrictions.
No interruption in, or temporary stoppage of, any of the aforesaid
services caused by repairs, renewals, improvements, alterations, strikes,
lockouts, labor controversies, accidents, inability to obtain fuel or supplies,
or other causes shall be deemed an eviction or disturbance of Lessee's use and
possession, or render Lessor liable for damages, by abatement of rent or
otherwise or relieve Lessee from any obligation herein set forth; provided,
however, that if there is a localized interruption in, or localized temporary
stoppage of, any of the aforesaid services in the Premises (as opposed to an
interruption in the general vicinity of the Complex not under Lessor's control),
and if such interruption or temporary stoppage is within the sole control of
Lessor and, after notice to Lessor, Lessor does not diligently attempt and
continue diligent attempts to cure such interruption or temporary stoppage, then
Lessee shall be entitled to a proportional abatement of Base Rent and Additional
Rent if seven (7) consecutive days of such interruption or temporary stoppage
occurs after Lessor's efforts to cure same have failed. Said abatement shall be
determined based upon the proportion of Lessee's business that Lessee is able to
conduct in the Premises, using commercially reasonable efforts, during the
period of any such interruption. In no event shall Lessor be required to provide
any heat, air conditioning, electricity or other service in excess of that
permitted by voluntary or involuntary guidelines or laws, ordinances or
regulations of governmental authority. Lessor reserves the right, from time to
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time, to make reasonable and non-discriminatory modifications to the above
standards for utilities and services. Lessee acknowledges and agrees that
natural gas is not presently available at the Premises, but that natural gas can
be tapped at Kyrene Road. In the event Lessee desires to tap said natural gas in
Kyrene Road and bring the same to the Premises, Lessee may do so at Lessee's
sole cost and expense provided Lessee first obtains the prior written consent of
Lessor to Lessee's plans for such extension of natural gas to the Premises.
ARTICLE VI. USE: The Premises shall be used for general warehouse purposes
including receiving, ordering, production, shipping, selling and billing of
products, materials and merchandise made or distributed by Lessee, its parent,
affiliates or subsidiaries and for carrying on such activities as may be
incidental thereto and for no other purpose; provided, however, Lessee may not
use or occupy the Premises, or knowingly permit the Premises to be used or
occupied, contrary to any statute, rule, order, ordinance, requirement or
regulation or any covenant, condition or restriction now or hereafter applicable
thereto, or in any manner which would violate any certificate of occupancy or
permit affecting the same, or which would cause structural injury to the
Premises or cause the value or usefulness of the Premises, or any part thereof,
substantially to diminish (reasonable wear and tear excepted) or which would
constitute a private or public nuisance or waste, and Lessee agrees that it will
promptly, upon discovery of any such use, take all necessary steps to compel
the discontinuance of such use. Lessee shall not be obligated to comply with
the terms of any covenant, condition or restriction hereafter recorded against
the Property by Lessor to the extent said covenant, condition or restriction
would materially adversely impair Lessee's ability to engage in the use
permitted hereby. Any use of the Premises by Lessee involving discharge of hot
water into the sewer system shall comply with all applicable laws, codes,
ordinances, rules, regulations, covenants and conditions now or hereafter
imposed against or encumbering the Property.
ARTICLE VII. CERTAIN RIGHTS RESERVED BY LESSOR: Lessor reserves the following
rights exercisable without notice and without liability to Lessee and without
effecting an eviction, constructive or actual, or disturbance of Lessee's use or
possession, or giving rise to any claim for setoff or abatement of rent:
A. To control, install, affix and maintain any and all signs on the
Property, or on the exterior of the Complex and in any common
corridors, entrances and other common areas thereof, except those
signs within the Premises not visible from outside the Premises.
B. To reasonably designate, limit, restrict and control any service in
or to the Complex, including but not limited to the designation of
sources from which Lessee may obtain sign painting and lettering;
provided, however, nothing contained herein shall be deemed to limit
the sources from which Lessee may obtain services used in the
ordinary course of Lessee's business, including, but not limited to,
courier or delivery services. Any restric-
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tion, designation, limitation or control imposed by reason of this
subparagraph shall be imposed uniformly on Lessee and other tenants
occupying space in the Complex.
C. To retain at all times and to use in appropriate instances keys to
all exterior doors into the Premises. No exterior locks shall be
changed without the prior written consent of Lessor. This provision
shall not apply to Lessee's safes or other areas maintained by
Lessee for the safety and security of monies, securities, negotiable
instruments or like items, or to other areas within the Premises
which Lessee deems proprietary.
D. To make repairs, improvements, alterations, additions or
installations, whether structural or otherwise, in and about the
Complex, or any part thereof, and for such purposes to enter upon
the Premises, and during the continuation of any of said work, to
temporarily close doors, entryways, public spaces and corridors in
the Complex and to interrupt or temporarily suspend services and
facilities. Lessor shall give reasonable advance notice to Lessee
prior to commencing such activities, and shall use commercially
reasonable efforts to complete such activities at such time and in
such manner so as to minimize any material adverse impact on the
ability of Lessee to conduct Lessee's business in the Premises.
E. To approve the weight, size and location of safes and other heavy
equipment and articles in and about the Premises and the Complex and
to require all such items to be moved into and out of the Complex
and the Premises only at such times and in such manner as Lessor
shall direct in writing. Upon approval of Lessee's space plan, as
evidenced by the initials of an authorized representative of Lessor
thereon, Lessor shall be deemed to have approved the weight, size
and location of items to be located with the Premises. In the event
any of such items shall be moved from the locations depicted on said
approved space plan, Lessor shall again have the approval rights
granted in this paragraph with respect to such items.
ARTICLE VIII. ALTERATIONS AND IMPROVEMENTS: Lessee shall not make any
improvements, alterations, additions or installations in or to the Premises
(hereinafter referred to as the "Work") without Lessor's prior written consent,
which consent may be withheld in Lessor's sole discretion in the event such
improvements, alterations, additions or installations affect the structural,
mechanical or electrical systems of the Premises, and which consent shall not be
unreasonably withheld for other improvements, alterations, additions or
installations. In the event Lessor should grant its consent to any
improvements, alterations, additions or installations, such consent shall be
contingent upon Lessee providing to Lessor, before commencement of the Work or
delivery of any materials to be used in the Work to the Premises or into the
Complex, plans and specifications, names and addresses of contractors, copies of
contracts, necessary permits and licenses, an indemnification in such
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form and amount as may be reasonably satisfactory to Lessor and a performance
bond executed by a commercial surety reasonably satisfactory to Lessor in an
amount equal to the cost of the Work and for the payment of all liens for labor
and material arising therefrom. Lessee agrees to defend and hold Lessor forever
harmless from any and all claims and liabilities of any kind and description
which may arise out of or be connected in any way with said improvements,
alterations, additions or installations. All Work shall be done only by
contractors or mechanics reasonably approved by Lessor and at such reasonable
times and in such manner as Lessor may from time to time reasonably designate.
All work done by Lessee or its agents, employees or contractors shall be done in
such a manner as to avoid labor disputes. Lessee shall pay the cost of all such
improvements, alterations, additions or installations (including a reasonable
charge for Lessor's services and for Lessor's inspection and engineering time in
the event Lessor is required to retain the services of a consultant in
connection with such services) and the cost of painting, restoring or repairing
the Premises and the Complex occasioned by such improvements, alterations,
additions or installations. Upon completion of the Work, Lessee shall furnish
Lessor with contractor's affidavits, full and final waivers of liens and
receipted bills covering all labor and materials expended and used. The Work
shall comply with all insurance requirements and all laws, ordinances, rules and
regulations of all governmental authorities and shall be constructed in a good
and workmanlike manner. Lessee shall permit Lessor to inspect construction
operations in connection with the Work. Lessee shall not be allowed to make any
improvements, alterations, additions or installations without taking reasonable
steps to assure that such action does not result in a labor dispute or otherwise
would not materially interfere with Lessor's operation of the Complex. Lessor,
by written notice to Lessee given at or prior to termination of this Lease, may
require Lessee, at Lessee's sole cost and expense, to remove any improvements,
alterations, additions or installations installed by Lessee in the Premises
(except for improvements related to general office use that were installed by
Lessee with Lessor's approval) and to repair or restore any damage caused by the
installation and removal of such improvements, alterations, additions or
installations; provided, however, with the exception of Lessee's trade fixtures
and equipment, the only improvements, additions or installations which Lessee
shall remove shall be those specified in Lessor's notice. Lessee shall keep the
Premises and the Complex free from any liens arising out of any work performed,
material furnished or obligations incurred by Lessee, and shall indemnify,
protect, defend and hold harmless Lessor from any liens and encumbrances arising
out of any work performed or material furnished by or at the direction of
Lessee. In the event that Lessee shall not, within twenty (20) days following
the imposition of any such lien, cause such lien to be released of record by
payment or posting of a proper bond, Lessor shall have, in addition to all other
remedies provided herein and by law, the right, but not the obligation, to cause
the same to be released by such means as it shall deem proper, including payment
of and/or defense against the claim giving rise to such lien. All such sums
paid by Lessor and all expenses incurred by it in connection therewith,
including attorneys' fees and costs, shall be payable as Additional Rent to
Lessor by Lessee on demand with interest at the
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rate provided in Article III accruing from the date paid or incurred by Lessor
until reimbursed to Lessor by Lessee.
ARTICLE IX. REPAIRS: Subject to Article X hereof, Lessee shall, during the
term of this Lease, at Lessee's expense, keep the Premises in as good order,
condition and repair as they were at the time Lessee took possession of the
same, reasonable wear and tear and damage from fire and other casualties
excepted. Lessee shall keep the Premises in a neat and sanitary condition, and
Lessee shall not commit any nuisance or waste on the Premises or in, on or about
the Complex, throw foreign substances in the plumbing facilities, or waste any
of the utilities furnished by the Lessor. All uninsured damage or injury to the
Premises or to the Complex caused by Lessee moving furniture, fixtures,
equipment or other devices in or out of the Premises or the Complex or by
installation or removal of furniture, fixtures, equipment, devices or other
property of Lessee or its agents, contractors, servants or employees, due to
carelessness, omission, neglect, improper conduct or other cause of Lessee or
its servants, employees, agents, visitors or licensees, shall be repaired,
restored and replaced promptly by Lessee at its sole cost and expense to the
same condition as existed immediately prior to such damage. All repairs,
restorations and replacements shall be in quality and class equal to the
original work. For the duration of the term hereof, Lessee shall be obligated
to maintain a maintenance contract for the mechanical equipment serving the
Premises, and Lessee shall provide evidence of said contract to Lessor (i)
concurrently with the commencement of the term of this Lease, and (ii) at such
other times as Lessor may reasonably require.
Lessor and its employees and agents shall have the right to enter the
Premises during or as a result of any emergency, or at any reasonable time or
times after giving Lessee reasonable advance notice for the purpose of
inspection, cleaning, repairs, altering or improving the same but nothing con-
tained herein shall be construed as imposing any obligation on Lessor to make
any repairs, alterations or improvements which are the obligation of Lessee. In
completing such repairs, alterations and improvements, Lessor shall use
commercially reasonable efforts to minimize any material adverse impact on the
ability of Lessee to engage in Lessee's business in the Premises.
Lessor and Lessee shall meet at least ten (10) days prior to Lessee
vacating the Premises for the express purpose of conducting a joint inspection
of the Premises to determine the scope of Lessee's responsibility for repairs
and restoration to be completed prior to Lessee vacating the Premises.
ARTICLE X. INSURANCE: Lessor shall keep the Complex insured for the benefit of
Lessor in an amount equivalent to the full replacement value thereof (excluding
foundation, grading and excavation costs) against:
(a) loss or damage by fire; and
(b) such other risk or risks of a similar or dissimilar nature as are
now or may be customarily covered with respect to
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buildings and improvements similar in construction, general location, use,
occupancy and design to the building of which the Premises is a part, including,
but without limiting the generality of the foregoing, windstorms, hail,
explosion, vandalism, malicious mischief, civil commotion provided such
additional coverage is obtainable and provided such additional coverage is such
as is customarily carried with respect to buildings and improvements similar in
construction, general location, use, occupancy and design to the building of
which the Premises is a part.
These insurance provisions shall in no way limit or modify any of the
obligations of Lessee under any provision of this Lease. In the event that
additional Phases are added to the Complex pursuant to Article XXVI, and such
buildings in any additional Phase are constructed in such a manner and for such
use as to require different insurance coverage than is required for the building
of which the Premises is a part, Lessor shall only include in Operating
Expenses that portion of such premium which Lessor would have paid for a
building comparable to the building of which the Premises is a part. Lessor
agrees that such policy or policies of insurance shall permit releases of
liability as provided herein and/or waiver of subrogation clause as to Lessee,
and Lessor waives, releases and discharges Lessee from all claims or demands
whatsoever which Lessor may have or acquire arising out of damage to or
destruction of the Complex or loss of use thereof occasioned by fire or other
casualty, whether such claim or demand may arise because of the negligence or
fault of Lessee or its agents, employees, customers or business invitees, or
otherwise, and Lessor agrees to look to the insurance coverage only in the event
of such loss. Notwithstanding the foregoing, Lessee shall be obligated to pay
the rental called for hereunder in the event of damage to or destruction of the
Premises or the Complex if such damage or destruction is occasioned by the
negligence or fault of Lessee, its agents or employees. Insurance premiums paid
thereon shall be a portion of the "Operating Expenses" described in Article II
hereof. Notwithstanding the above, in the event a release of Lessee or waiver
of subrogation as to Lessee (without invalidation of coverage) becomes generally
unavailable in insurance policies as to commercial warehouse projects similar to
the Complex, the release and any waiver of subrogation above provided for shall
cease upon written notice by Lessor to Lessee of such event. Thereafter, Lessee
may, upon written notice to Lessor, require Lessor to secure a waiver of
subrogation as to Lessee if (a) a right to waive subrogation as to Lessee
thereafter becomes available without increased premium, or (b) a right to waive
subrogation as to Lessee becomes available and Lessee pays any increased premium
required in connection therewith.
Lessee shall keep all of its machinery, equipment, furniture, fixtures,
personal property (including also property under the care, custody or control of
Lessee) and business interests which may be located in, upon or about the
Premises insured for the benefit of Lessee in an amount equivalent to the full
replacement value or insurable value thereof against:
(a) loss or damage by fire; and
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(b) such other risk or risks of a similar or dissimilar nature as are
now, or may in the future be, customarily covered with respect to a tenant's
machinery, equipment, furniture, fixtures, personal property and business
located in a building similar in construction, general location, use, occupancy
and design to the building of which the Premises is a part, including, but
without limiting the generality of the foregoing, windstorms, hail, explosions,
vandalism, theft, malicious mischief, civil commotion.
Lessee agrees that such policy or policies of insurance shall permit
releases of liability as provided herein and/or waiver of subrogation clause as
to Lessor, and Lessee waives, releases and discharges Lessor and its agents,
employees and contractors from all claims or demands whatsoever which Lessee may
have or acquire arising out of damage to or destruction of the machinery,
equipment, furniture, fixtures, personal property and loss of use thereof
occasioned by fire or other casualty, whether such claim or demand may arise
because of the negligence or fault of Lessor or its agents, employees,
contractors or otherwise, and Lessee agrees to look to the insurance coverage
only in the event of such loss.
Lessor shall, as a portion of the Operating Expenses defined in Article
II, maintain, for its benefit and the benefit of its managing agent, general
public liability insurance against claims for personal injury, death or property
damage occurring upon, in or about the Complex, such insurance to afford
protection to Lessor and its managing agent.
Lessee shall, at Lessee's sole cost and expense but for the mutual benefit
of Lessor, its managing agent and Lessee, maintain general public liability
insurance against claims for personal injury, death or property damage occurring
upon, in or about the Premises, such insurance to afford protection to Lessor,
its managing agent and Lessee to the limit of not less than One Million and
No/100 Dollars ($1,000,000.00) in respect to the injury or death to a single
person, and to the limit of not less than Three Million and No/100 Dollars
($3,000,000.00) in respect to any one accident, and to the limit of not less
than Five Hundred Thousand and No/100 Dollars ($500,000.00) in respect to any
property damage. Such policies of insurance shall be written in companies
licensed to write insurance in Arizona having an AM Best's rating of _____ or
better, naming Lessor and its managing agent as additional insureds thereunder,
and such policies, or a memorandum or certificate of such insurance, shall be
delivered to Lessor endorsed "Premium Paid" by the company or agent issuing the
same or accompanied by other evidence satisfactory to Lessor that the premium
thereon has been paid. At such time as insurance limits required of tenants in
warehouse buildings in the metropolitan area in which the Complex is located are
generally increased to greater amounts, Lessor shall have the right to require
such greater limits as may then be customary. Lessee agrees to include in such
policy the contractual liability coverage insuring Lessee's indemnification
obligations provided for herein. Any such coverage shall be deemed primary
to any liability coverage secured by Lessor. Such insurance shall also afford
coverage for all claims based upon acts, omissions, injury or damage, which
claims occurred or arose
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(or the onset of which occurred or arose) in whole or in part during the policy
period.
Except to the extent caused by the gross negligence of Lessor, Lessee
agrees to indemnify, protect, defend and hold harmless Lessor and Lessor's
partners, shareholders, employees, lender and managing agent harmless from and
against any and all claims, losses, costs, liabilities, actions and damages,
including without limitation attorneys' fees and costs, by or on behalf of any
person or persons, firm or firms, corporation or corporations, arising from any
breach or default on the part of Lessee in the performance of any covenant or
agreement on the part of Lessee to be performed, pursuant to the terms of this
Lease, or arising from any act or negligence on the part of Lessee or its
agents, contractors, servants, employees or licensees, or arising from any
accident, injury or damage to the extent caused by Lessee or its agents or
employees to any person, firm or corporation occurring during the term of this
Lease or any renewal thereof, in or about the Premises and the Complex, and from
and against all costs, reasonable counsel fees, expenses and liabilities
incurred in or about any such claim or action or proceeding brought thereon; and
in case any action or proceeding be brought against Lessor or its managing agent
by reason of any such claim, Lessee, upon notice from Lessor, covenants to
resist or defend such action or proceeding by counsel selected by Lessee and
reasonably satisfactory to Lessor.
Unless caused by the gross negligence of Lessor, Lessee agrees, to the
extent not expressly prohibited by law, that Lessor and Lessor's agents,
employees and servants shall not be liable, and Lessee waives all claims for
damage to property and business sustained during the term of this Lease by
Lessee occurring in or about the Complex, resulting directly or indirectly from
any existing or future condition, defect, matter or thing in the Premises, the
Complex or any part thereof, or from equipment or appurtenances becoming out of
repair, or from accident, or from any occurrence or act or omission of Lessor,
Lessor's agents, employees or servants, any tenant or occupant of the Complex or
any other person. This paragraph shall apply especially, but not exclusively,
to damage caused as aforesaid or by the flooding of basements or other
subsurface areas, or by refrigerators, sprinkling devices, air conditioning
apparatus, water, snow, frost, steam, excessive heat or cold, falling plaster,
broken glass, sewage, gas, odors or noise, or the bursting or leaking of pipes
or plumbing fixtures, and shall apply equally, whether any such damage results
from the act or omission of other tenants or occupants in the Complex or any
other persons, and whether such damage be caused by or result from any of the
aforesaid, or shall be caused by or result from other circumstances of a similar
or dissimilar nature.
Anything herein to the contrary notwithstanding, in the event any damage
to the Complex results from any act or omission of Lessee, its agents, employees
or invitees, and all or any portion of Lessor's loss is within the "deductible"
portion of Lessor's insurance coverage, Lessee shall pay to Lessor the amount of
such deductible loss (not to exceed $1,000 per event). All property in the
Complex or on the Premises belonging to Lessee or its agents, employees or
invitees or otherwise located at the Premises, shall
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be at the risk of Lessee only, and Lessor shall not be liable for damage thereto
or theft, misappropriation or loss thereof, and Lessee agrees to defend and hold
Lessor and Lessor's agents, employees and servants harmless and indemnify them
against claims and liability for injuries to such property, unless such damage
or injury results from the gross negligence of Lessor. Lessee shall not do or
permit anything to be done in or about the Premises nor bring or keep anything
therein which will in any way increase the existing rate of or affect in any
other way any fire or other insurance upon the building of which the Premises is
a part or any of its contents, or cause a cancellation of any insurance policy
covering the Complex or any of its contents. In such event, Lessor shall give
written notice to Lessee of such matters and Lessee shall have a period of five
(5) days therefrom to cease such activity or remove such items from the
Premises. In the event Lessee has not ceased such activity or removed such
items from the Premises within such five (5) day period, Lessee shall promptly,
upon demand, reimburse Lessor for the full amount of any additional premium
charged for such policy by reason of Lessee's failure to comply with the
provisions of this paragraph, it being understood that such demand for
reimbursement shall not be Lessor's exclusive remedy. Lessee shall promptly,
upon demand, reimburse Lessor for any additional premium charged for any such
policy by reason of Lessee's failure to comply with the provisions of this
Article.
In the event Lessee fails to provide Lessor with evidence of insurance
required under this Article X, Lessor may, but shall not be obligated to,
without further demand upon Lessee, and without waiving or releasing Lessee from
any obligation contained in this Lease, obtain such insurance and Lessee agrees
to repay, upon demand, all such sums incurred by Lessor in effecting such
insurance. All such sums shall become a part of the Additional Rent payable
hereunder, but no such payment by Lessor shall relieve Lessee from any default
under this Lease.
ARTICLE XI. ASSIGNMENT AND SUBLETTING: Lessee shall not, without the prior
written consent of Lessor, (i) transfer, pledge, mortgage or assign this Lease
or any interest hereunder; (ii) permit any assignment of this Lease by voluntary
act, operation of law or otherwise; (iii) sublet the Premises or any part
thereof; or (iv) permit the use of the Premises by any parties other than Lessee
and its agents and employees, its subsidiaries, affiliates or parent company for
the uses permitted under this Lease. Lessee shall seek such written consent of
Lessor by a written request therefor, setting forth such information as Lessor
may reasonably deem necessary. Lessee shall, by notice in writing, advise
Lessor of Lessee's intention, from, on and after a stated date (which shall not
be less than thirty (30) days after the date of Lessee's notice), to assign this
Lease or to sublet any part or all of the Premises for the balance or any part
of the term. Lessee's notice shall include all of the terms of the proposed
assignment or sublease and shall state the consideration therefor. In such
event, Lessor shall have the right, to be exercised by giving written notice to
Lessee within thirty (30) days after receipt of Lessee's notice, to recapture
the space described in Lessee's notice and such recapture notice shall, if
given, cancel and terminate this Lease with respect to the space therein
described as of the date
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stated in Lessee's notice. Lessee's notice shall state the name and address of
the proposed assignee or subtenant and a true and complete copy of the proposed
assignment or sublease shall be delivered to Lessor with Lessee's notice. If
Lessee's notice shall cover all of the Premises, and Lessor shall have exercised
its foregoing recapture right, the term of this Lease shall expire and end on
the date stated in Lessee's notice as fully and completely as if that date had
been herein definitely fixed for the expiration of the term. If, however, this
Lease be canceled with respect to less than the entire Premises, the Base Rent
and Additional Rent shall be adjusted pro rata in proportion to the portion of
the Premises recaptured and such rent shall be reduced accordingly from and
after the termination date for said portion, and this Lease as so amended shall
continue thereafter in full force and effect. The rent adjustments provided for
herein shall be evidenced by an amendment to this Lease executed by Lessor and
Lessee. If this Lease shall be terminated in the manner aforesaid, either as to
the entire Premises or only a portion thereof, to such extent the term of this
Lease shall end upon the appropriate effective date of the proposed sublease or
assignment as if that date had been originally fixed in this Lease for such
expiration, and in the event of a termination affecting less than the entire
Premises, Lessee shall comply with Article XIV ("Surrender of Premises") of this
Lease with respect to such portion of the Premises affected thereby.
Notwithstanding anything to the contrary herein, if Lessee desires to sell its
business and either (i) assign to the purchaser thereof all of Lessee's interest
in this Lease or (ii) sublet all of the Premises to the purchaser thereof, the
provisions of this Article X shall otherwise apply to such situation except
Lessor shall have no right to recapture the Premises.
In the event of any termination pursuant to this paragraph, Lessee shall,
at its sole cost and expense, discharge in full any commission which may be due
and owing as a result of any proposed assignment or subletting, whether or not
the subject portion of the Premises is "recaptured" pursuant thereto and rented
by Lessor to the proposed tenant or any other tenant.
If Lessor, upon receiving Lessee's notice with respect to any such space,
shall not exercise its right to recapture as aforesaid, Lessor will not
unreasonably withhold its consent to Lessee's assignment of the Lease or
subletting such space to the party identified in Lessee's notice, provided,
however, that in the event Lessor consents to any such assignment or subletting,
and as a condition thereto, Lessee shall pay to Lessor fifty percent (50%) of
all profit derived by Lessee from such assignment or subletting. For purposes
of the foregoing, profit shall be deemed to include, but shall not be limited
to, the amount of all rent payable by such assignee or sublessee in excess of
the Base Rent, and rent adjustments, payable by Lessee under this Lease. If a
part of the consideration for such assignment or subletting shall be payable
other than in cash, the payment to Lessor shall be in cash for its share of any
non-cash consideration based upon the fair market value thereof.
Lessee shall and hereby agrees that it will furnish to Lessor upon request
from Lessor a complete statement, certified by an
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independent certified public accountant, setting forth in detail the computation
of all profit derived and to be derived from such assignment or subletting, such
computation to be made in accordance with generally accepted accounting
principles. Lessee agrees that Lessor and its authorized representatives shall
be given access at all reasonable times to the books, records and papers of
Lessee relating to any such assignment or subletting, and Lessor shall have the
right to make copies thereof. The percentage of Lessee's profit due Lessor
hereunder shall be paid by Lessee to Lessor within five (5) days of receipt
by Lessee of all payments made from time to time by such assignee or sublessee
to Lessee.
For purposes of the foregoing, any change in the partners of Lessee, if
Lessee is a partnership, or, if Lessee is a corporation, any transfer of any or
all of the shares of stock of Lessee by sale, assignment, operation of law or
otherwise resulting in a change in the present control of such corporation by
the person or persons owning a majority of such shares as of the date of this
Lease, shall be deemed to be an assignment within the meaning of this Article
XI. Notwithstanding the provisions of this paragraph, the transfer of any or
all of the shares of stock of Lessee shall not be deemed an assignment for
purposes of this Article X, provided that, at the time of such transfer, said
stock is publicly traded on a recognized national stock exchange.
Any subletting or assignment hereunder shall not release or discharge
Lessee of or from any liability, whether past, present or future, under this
Lease, and Lessee shall continue fully liable thereunder. The subtenant or
subtenants or assignee shall agree in a form satisfactory to Lessor to agree to
be obligated for, comply with, and be bound by all of the terms, covenants,
conditions, provisions and agreements of this Lease to the extent of the space
sublet or assigned, and Lessee shall deliver to Lessor promptly after execution
an executed copy of each such sublease or assignment. Consent by Lessor to any
assignment of this Lease or to any subletting of the Premises shall not be a
waiver of Lessor's rights under this Article as to any subsequent assignment or
subletting.
Any sale, assignment, mortgage, transfer or subletting of this Lease which
is not in compliance with the provisions of this Article XI shall be of no
effect and void. Lessor's right to assign its interest in this Lease shall
remain unqualified. Lessor may make a reasonable charge (not to exceed $500.00)
to Lessee for any reasonable attorneys' fees or expenses incident to a review of
any documentation related to any proposed assignment or subletting by Lessee.
Lessee, without the consent of Lessor, in the ordinary course of Lessee's
business shall have the right to allow a portion of the Premises (not to exceed
five percent (5%) of the floor area thereof) to be used by a licensee from time
to time as reasonably necessary in connection with the operation of Lessee's
business, subject to all the terms, covenants and conditions of this Lease,
provided notice of the nature of the use is given promptly to Lessor prior to
said use commencing, and further provided that the occupancy is subject to all
of the terms, covenants and conditions of this Lease.
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Notwithstanding anything to the contrary in this Lease, Lessee shall not
assign its rights under this Lease or sublet all or any part of the Premises to
a person, firm or corporation which is (or, immediately prior to such subletting
or assignment, was) a tenant or occupant of the Complex or any warehouse or
office building on property contiguous to the Complex owned by Lessor.
The consent of Lessor to a transfer may not be unreasonably withheld,
provided that should Lessor withhold its consent for any of the following
reasons, which list is not exclusive, such withholding shall be deemed to be
reasonable:
(a) Financial strength of the proposed transferee is not at least equal
to that of Lessee at the time of execution of this Lease or of
tenants occupying comparable premises in the Complex or in other
buildings owned or operated by Lessor located in the same
metropolitan area as the Complex;
(b) A proposed transferee whose occupation of the Premises would cause a
diminution in the reputation of the Complex or the other businesses
located therein due to the nature of the business conducted by such
proposed transfer;
(c) A proposed transferee whose impact on the common areas or the other
occupants of the Complex would be disadvantageous due to, without
limitation, excessive noise or vibrations, or an impact on the
parking facilities substantially in excess of that for a normal
warehouse use; or
(d) A proposed transferee whose occupancy will require any variation in
the terms and conditions of this Lease.
Lessee agrees that its personal business skills and philosophy were an
important inducement to Lessor for entering into this Lease and that Lessor may
reasonably object to the transfer of the Premises to another tenant whose
proposed use, while permitted by this Lease, would involve a different quality,
manner or type of business skill than that of Lessee.
ARTICLE XII. DAMAGE BY FIRE OR OTHER CASUALTY: If fire or other casualty shall
render the whole or any material portion of the Premises untenantable, and the
Premises can reasonably be expected to be made tenantable within one hundred
twenty (120) days from the date of such event, then Lessor shall repair and
restore the Premises and the Complex to as near their condition prior to the
fire or other casualty as is reasonably possible within such one hundred twenty
(120) day period (subject to delays for Force Majeure) and notify Lessee that it
will be doing so, such notice to be mailed within thirty (30) days from the date
of such damage or destruction, and this Lease shall remain in full force and
effect, but the rent for the period during which the Premises are untenantable
shall be abated pro rata (based upon the portion of the Premises which is
untenantable). If Lessor is required to repair the Complex and/or the
Premises, as aforesaid, said work shall be undertaken and prosecuted with all
due diligence and speed. For purposes of this Lease, "Force Majeure" shall be
deemed to mean delay
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caused by act or neglect of Lessee or those acting for or under Lessee, or by
labor disputes, casualties, acts of God or the public enemy, governmental
embargo restrictions, shortages of fuel, labor or building materials, action or
nonaction of public utilities, or of local, state or federal governments
affecting the Tenant Improvements (such as a delay in the issuance of a building
permit or other governmental approval), or other causes beyond Lessor's
reasonable control.
If fire or other casualty shall render the whole or any material part of
the Premises untenantable and the Premises cannot reasonably be expected to be
made tenantable within one hundred twenty (120) days from the date of such
event, then either party, by notice in writing to the other mailed within thirty
(30) days from the date of such damage or destruction, may terminate this Lease
effective upon a date within thirty (30) days from the date of such notice.
In the event that more than sixty percent (60%) of the value of the
Complex is damaged or destroyed by fire or other casualty, and in the event a
material portion of the building of which the Premises is a part is damaged or
destroyed by such fire or other casualty, and irrespective of whether damage or
destruction can be made tenantable within one hundred twenty (120) days
thereafter, then at Lessor's option, by written notice to Lessee, mailed within
forty-five (45) days from the date of such damage or destruction, Lessor may
terminate this Lease effective upon a date within ninety (90) days from the date
of such notice to Lessee.
If fire or other casualty shall render any portion of the Premises or any
material portion of the building of which the Premises is a part untenantable
and the insurance proceeds are not sufficient to make repairs, then Lessor may,
by notice to Lessee, mailed within thirty (30) days from the date of such
damages or destruction, terminate this Lease effective upon a date within thirty
(30) days from the date of such notice.
If the Premises or the Complex is damaged, and such damage is of the type
insured against under the fire and special form property damage insurance
maintained by Lessor hereunder, the cost of repairing said damage up to the
amount of the deductible under said insurance policy shall be included as a part
of the Operating Expenses. If the damage is not covered by such insurance
policies and Lessor elects to repair the damage, then Lessee shall pay Lessor a
pro rata share of the "deductible amount" (if any) under Lessor's insurance
policies based on Lessee's percentage interest of the Premises and, if the
damage was due to an act or omission of Lessee, Lessee shall pay Lessor the
difference between the actual cost of repair and any insurance proceeds received
by Lessor.
If fire or other casualty shall render the whole or any material part of
the Premises untenantable and the Premises cannot reasonably be expected to be
made tenantable within one hundred twenty (120) days from the date of such event
and neither party hereto terminates this Lease pursuant to its rights herein or
in the event that more than sixty percent (60%) of the value of the Complex is
damaged or destroyed by fire or other casualty, and Lessor does not
-20-
terminate this Lease pursuant to its option granted herein, or in the event that
sixty percent (60%) or less of the value of the Complex is damaged or destroyed
by fire or other casualty and neither the whole nor any material portion of the
Premises is rendered untenantable, then Lessor shall repair and restore the
Premises and the Complex to as near their condition prior to the fire or other
casualty as is reasonably possible with all due diligence and speed (subject to
delays for causes beyond Lessor's reasonable control) and the rent for the
period during which the Premises are untenantable shall be abated pro rata
(based upon the portion of the Premises which is untenantable). In no event
shall Lessor be obligated to repair or restore any special equipment or
improvements installed by Lessee. Anything herein contained to the contrary
notwithstanding, Lessor shall not be obligated to spend more than the net
insurance proceeds available to Lessor on account of any fire or other casualty
in order to repair or restore the Premises or the Complex following such
casualty; provided, however, Lessor shall notify Lessee promptly after the
casualty if Lessor is unwilling to expend more than available net insurance
proceeds.
In the event of a termination of this Lease pursuant to this Article, rent
shall be apportioned on a per diem basis and paid to the date of the fire or
other casualty.
ARTICLE XIII. EMINENT DOMAIN: If the whole of or any substantial part of the
Premises is taken by any public authority under the power of eminent domain, or
taken in any manner for any public or quasi-public use, so as to render the
remaining portion of the Premises unsuitable for the purposes intended
hereunder, then the term of this Lease shall cease as of the day possession
shall be taken by such public authority and Lessor shall make a pro rata refund
of any prepaid rent. All damages awarded for such taking under the power of
eminent domain or any like proceedings shall belong to and be the property of
Lessor, Lessee hereby assigning to Lessor Lessee's interest, if any, in said
award. In the event that fifty percent (50%) or more of the building area or
fifty percent (50%) or more of the value of the building of which the Premises
is a part is taken by public authority under the power of eminent domain, then,
at Lessor's option, by written notice to Lessee mailed within sixty (60) days
from the date possession shall be taken by such public authority, Lessor may
terminate this Lease effective upon a date within ninety (90) days from the date
of such notice to Lessee. Further, if the whole of or any material part of the
Premises is taken by public authority under the power of eminent domain, or
taken in any manner for any public or quasi-public use, so as to render the
remaining portion of the Premises unsuitable for the purposes intended
hereunder, upon delivery of possession to the condemning authority pursuant to
the proceedings, Lessee may, at its option, terminate this Lease as to the
remainder of the Premises by written notice to Lessor, such notice to be given
to Lessor within thirty (30) days after Lessee receives notice of the taking.
Lessee shall not have the right to terminate this Lease pursuant to the
preceding sentence unless (i) the business of Lessee conducted in the portion of
the Premises taken cannot be carried on with substantially the same utility and
efficiency in the remainder of the Premises (or any substitute space securable
by Lessee pursuant to clause (ii) hereof); and (ii)
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Lessee cannot secure substantially similar (in Lessee's reasonable judgment)
alternate space upon the same terms and conditions as set forth in this Lease
(including rental) from Lessor in the Complex (with Lessor to bear the costs and
expenses of moving Lessee to such alternate space). Any notice of termination
shall specify the date no more than sixty (60) days after the giving of such
notice as the date for such termination.
Anything in this Article XIII to the contrary notwithstanding, Lessee
shall have the right to prove in any condemnation proceedings and to receive any
separate award which may be made for damages to or condemnation of Lessee's
movable trade fixtures and equipment and for moving expenses; provided, however,
Lessee shall in no event have any right to receive any award for its interest in
this Lease or for loss of leasehold; and, provided further, Lessee shall not be
entitled to claim any award to the extent the award to Lessor would be reduced
below the amount which would be allowed to Lessor absent such claim by Lessee.
In the event of a partial condemnation of the Complex or the Premises and this
Lease is not terminated, Lessor shall, at its sole cost and expense, restore the
Premises and Complex to a complete architectural unit and the Base Rent provided
for herein during the period from and after the date of delivery of possession
pursuant to such proceedings to the termination of this Lease shall be reduced
pro rata based on the square footage of the Premises so taken. Notwithstanding
the foregoing provisions of this Article, Lessor may terminate this Lease with
no further liability to Lessee whatsoever in the event that following any taking
of any part of the Complex by condemnation or right of eminent domain, or any
conveyance in lieu thereof, any party holding a mortgage, trust deed or similar
lien on Lessor's interest in the Complex elects to require the application of an
award or payment for the taking or conveyance in lieu thereof to reduce the
indebtedness secured by such mortgage, trust deed or similar lien. Lessor's
obligation to rebuild, repair or restore under this Article shall in all events
be limited to the extent of the net condemnation proceeds available to Lessor
therefor.
ARTICLE XIV. SURRENDER OF PREMISES: On the last day of the term of this Lease,
or on the sooner termination thereof, Lessee shall peaceably surrender the
Premises in good condition and repair consistent with Lessee's duty to make
repairs as herein provided. On or before the last day of the term of this Lease,
or the date of sooner termination thereof, Lessee shall, at its sole cost and
expense, remove all of its property and trade fixtures and equipment from the
Premises, and all property not removed shall be deemed abandoned. Lessee shall
leave the Premises in good order, condition and repair, reasonable wear and tear
and damage from fire and other casualty not caused by Lessee excepted. Lessor
may, at Lessor's option, deduct the amount of any expenses incurred by Lessor
with respect to the removal, transportation or storage of abandoned property
from the Security Deposit required pursuant to Article XXV hereof. In the event
that the Security Deposit is not sufficient to reimburse Lessor for the full
amount of such expenses, or in the event that Lessor elects not to withhold such
amounts from the Security Deposit, Lessee shall reimburse Lessor upon demand for
any expenses incurred by Lessor with respect to removal, transportation or
storage of abandoned property and with
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respect to restoring said Premises to good order, condition and repair. All
improvements, alterations, additions, installations and fixtures, other than
Lessee's trade fixtures and equipment, which have been made or installed by
either Lessor or Lessee upon the Premises shall remain the property of Lessor
and shall be surrendered with the Premises as a part thereof, unless Lessee is
required to remove same pursuant to the provisions of Article VIII hereof. If
the Premises are not surrendered at the end of the term or sooner termination
thereof, Lessee shall indemnify Lessor against loss or liability resulting from
delay by Lessee in so surrendering the Premises, including, without limitation,
claims made by any succeeding tenants founded on such delay and any attorneys'
fees resulting therefrom. Lessee shall promptly surrender all keys for the
Premises to Lessor at the place then fixed for the payment of rent and shall
inform Lessor of the combinations of any vaults, locks and safes left on the
Premises.
In the event Lessee remains in possession of the Premises after expiration
of this Lease and without the execution of a new lease, but with Lessor's
written consent, Lessee shall be deemed to be occupying the Premises as a tenant
from month-to-month, subject to all the provisions, conditions and obligations
of this Lease insofar as the same can be applicable to a month-to-month tenancy,
except that the Base Rent shall be escalated to one hundred fifty percent (150%)
of the Base Rent payable hereunder immediately prior to the expiration of this
Lease. In the event Lessee remains in possession of the Premises after
expiration of this Lease and without the execution of a new lease and without
Lessor's written consent, Lessee shall be deemed to be occupying the Premises
without claim of right and Lessee shall pay Lessor for all costs arising out of
loss or liability resulting from delay by Lessee in so surrendering the Premises
as above provided and shall pay as a charge for each day of occupancy an amount
equal to two hundred percent (200%) of the Base Rent (on a daily basis) payable
hereunder immediately prior to the expiration of this Lease plus the Additional
Rent (on a daily basis) then currently being charged by Lessor on new leases in
the Complex for space similar to the Premises.
ARTICLE XV. DEFAULT OF LESSEE: The occurrence of any one or more of the
following events (in this Article sometimes called "Event of Default") shall
constitute a default and breach of this Lease by Lessee:
A. If Lessee fails to pay any Base Rent or Additional Rent payable
under this Lease or fails to pay any obligation required to be paid
by Lessee when and as the same shall become due and payable, and
such default continues for a period of five (5) days after written
notice thereof given by Lessor to Lessee.
B. If Lessee fails to perform any of Lessee's nonmonetary obligations
under this Lease for a period of thirty (30) days after written
notice from Lessor; provided that if more time is required to
complete such performance, Lessee shall not be in default if Lessee
commences such performance within the thirty-day period and
thereafter
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diligently pursues its completion. However, Lessor shall not be
required to give such notice if Lessee's failure to perform
constitutes a non-curable breach of this Lease. The notice required
by this subsection is intended to satisfy any and all notice
requirements imposed by law on Lessor and is not in addition to any
such requirement.
C. If Lessee, by operation of law or otherwise, violates the provisions
of Article XI hereof relating to assignment, sublease, mortgage or
other transfer of Lessee's interest in this Lease or in the Premises
or in the income arising therefrom.
D. Lessee, by operation of law or otherwise, violates the provisions of
Article XVII.R relating to compliance with environmental laws.
E. If (i) Lessee makes a general assignment or general arrangement for
the benefit of creditors; (ii) a petition for adjudication of
bankruptcy or for reorganization or rearrangement is filed by or
against Lessee and is not dismissed within thirty (30) days; (iii)
if a trustee or receiver is appointed to take possession of
substantially all of Lessee's assets located at the Premises or of
Lessee's interest in this Lease and possession is not restored to
Lessee within thirty (30) days; or (iv) if substantially all of
Lessee's assets located at the Premises or of Lessee's interest in
this Lease is subjected to attachment, execution or other judicial
or non-judicial seizure which is not discharged within thirty (30)
days. If a court of competent jurisdiction determines that any of
the acts described in this subsection does not constitute an
Event of Default and a trustee is appointed to take possession
(or if Lessee remains a debtor in possession) and such trustee or
Lessee transfers Lessee's interest hereunder, then Lessor shall
receive, as Additional Rent, the difference between the rent (or any
other consideration) paid in connection with such assignment or
sublease and the rent payable by Lessee hereunder. As used in this
subsection, the term "Lessee" shall also mean any guarantor of
Lessee's obligations under this Lease. If any such Event of Default
shall occur, Lessor, at any time during the continuance of any such
Event of Default, may give written notice to Lessee stating that
this Lease shall expire and terminate on the date specified in such
notice, and upon the date specified in such notice this Lease, and
all rights of Lessee under this Lease, including all rights of
renewal whether exercised or not, shall expire and terminate, or in
the alternative or in addition to the foregoing remedy, Lessor may
assert and have the benefit of any other remedy allowed herein, at
law, or in equity.
Upon the occurrence of an Event of Default by Lessee, and at any time
thereafter, with or without notice or demand and without limiting Lessor in the
exercise of any right or remedy which Lessor
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may have, Lessor shall be entitled to the rights and remedies set forth below:
A. Terminate Lessee's right to possession of the Premises by any lawful
means, in which case this Lease shall not terminate unless Lessor
gives written notice to Lessee of its intention to terminate this
Lease and Lessee shall immediately surrender possession of the
Premises to Lessor. In such event, Lessor shall have the immediate
right to reenter and remove all persons and property, and such
property may be removed and stored in a public warehouse or
elsewhere at the cost of, and for the account of Lessee, all without
service of notice or resort to legal process and without being
deemed guilty of trespass, or becoming liable for any loss or damage
which may be occasioned thereby. In the event that Lessor shall
elect to so terminate this Lease, then Lessor shall be entitled to
recover from Lessee all damages incurred by Lessor by reason of
Lessee's default, including:
1. The equivalent of the amount of the Base Rent and Additional
Rent which would be payable under this Lease by Lessee if this
Lease were still in effect, less
2. The net proceeds of any reletting affected pursuant to the
provisions of this Article XV hereof after deducting all of
Lessor's reasonable expenses in connection with such relet-
ting, including, without limitation, all repossession costs,
brokerage commissions, legal expenses, reasonable attorneys'
fees, alteration costs, and expenses of preparation of the
Premises, or any portion thereof, for such reletting.
Lessee shall pay such current damages in the amount determined in
accordance with the terms of this Article XV as set forth in a
written statement thereof from Lessor to Lessee (hereinafter called
the "Deficiency"), to Lessor in monthly installments on the days on
which the rent would have been payable under this Lease if this
Lease were still in effect, and Lessor shall be entitled to recover
from Lessee each monthly installment of the Deficiency as the same
shall arise.
B. At any time after an Event of Default, whether or not Lessor shall
have collected any monthly Deficiency as set forth in this Article
XIV, Lessor shall be entitled to recover from Lessee, and Lessee
shall pay to Lessor, on demand, as and for final damages for
Lessee's default, an amount equal to the then present worth of the
amount by which (i) the aggregate of the Base Rent and Additional
Rent and any other charges to be paid by Lessee hereunder for the
unexpired portion of the term of this Lease (assuming this Lease had
not been so terminated), exceeds (ii) the fair market rents and all
other charges for the Premises during the unexpired portion of the
term of this
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Lease (assuming this Lease had not been so terminated). In the
computation of present worth, a discount at the rate of 6% per annum
shall be employed. If the Premises, or any portion thereof, shall
be relet by Lessor for the unexpired term of this Lease, or any part
thereof, before presentation of proof of such damages to any court,
commission or tribunal, the amount of rent received upon such
reletting shall be offset against any monies claimed pursuant to
this subsection. Nothing herein contained or contained in this
Article XV shall limit or prejudice the right of Lessor to prove for
and obtain, as damages, an amount equal to the maximum allowed by
any statute or rule of law in effect at the time when, and governing
the proceedings in which, such damages are to be proved, whether
or not such amount be greater, equal to or less than the amount of
the difference referred to above.
C. Upon the occurrence of an Event of Default by Lessee, Lessor shall
also have the right, with or without terminating this Lease, to
reenter the Premises to remove all persons and property from the
Premises. Such property may be removed and stored in a public
warehouse or elsewhere at the cost of and for the account of Lessee.
If Lessor shall elect to reenter the Premises, Lessor shall not be
liable for damages by reason of such reentry.
D. If Lessor does not elect to terminate this Lease as provided in this
Article XV then Lessor may, from time to time, recover all rent as
it becomes due under this Lease. At any time thereafter, Lessor may
elect to terminate this Lease and to recover damages to which Lessor
is entitled.
E. In the event that Lessor should elect to terminate this Lease and to
relet the Premises, it may execute any new lease in its own name. In
the event that Lessor should not elect to terminate this Lease, it
may re-let the premises to a substitute tenant. Lessee hereunder
shall have no right or authority whatsoever to collect any rent from
such substitute tenant. The proceeds of any such reletting shall be
applied as follows:
1. First, to the payment of any indebtedness other than rent due
hereunder from Lessee to Lessor, including but not limited to
storage charges or brokerage commissions owing from Lessee to
Lessor as the result of such reletting;
2. Second, to the payment of the reasonable costs and expenses of
reletting the Premises, including alterations and repairs
which Lessor, in its reasonable, good faith discretion, deems
reasonably necessary and advisable and reasonable attorneys'
fees incurred by Lessor in connection with the retaking of the
Premises and such reletting;
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3. Third, to the payment of rent and other charges due and unpaid
hereunder; and
4. Fourth, to the payment of future rent and other damages
payable by Lessee under this Lease.
Lessor shall not be deemed to have terminated this Lease and the Lessee's
right to possession of the leasehold or the liability of Lessee to pay rent
thereafter to accrue or its liability for damages under any of the provisions
hereof, unless Lessor shall have notified Lessee in writing that it has so
elected to terminate this Lease. Lessee covenants that the retaking of
possession by Lessor or the service by Lessor of any notice pursuant to the
applicable unlawful detainer statutes of the state in which the Complex is
located and Lessee's surrender of possession pursuant to such notice shall not
(unless Lessor elects to the contrary at the time of, or at any time subsequent
to the service of, such notice, and such election be evidenced by a written
notice to Lessee) be deemed to be a termination of this Lease or of Lessee's
right to possession thereof.
All rights, options and remedies of Lessor contained in this Lease shall
be construed and held to be cumulative, and no one of them shall be exclusive of
the other, and Lessor shall have the right to pursue any one or all of such
remedies or any other remedy or relief which may be provided by law whether or
not stated in this Lease. No waiver by Lessor of a breach of any of the terms,
covenants or conditions of this Lease by Lessee shall be construed or held to be
a waiver of any succeeding or preceding breach of the same or any other term,
covenant or condition therein contained. No waiver of any default of Lessee
hereunder shall be implied from any omission by Lessor to take any action on
account of such default if such default persists or is repeated, and no express
waiver shall affect default other than as specified in said waiver. The consent
or approval by Lessor to or of any act by Lessee requiring Lessor's consent or
approval shall not be deemed to waive or render unnecessary Lessor's consent
to or approval of any subsequent similar acts by Lessee.
Lessee shall reimburse Lessor, upon demand, for any costs or expenses
incurred by Lessor in excess of Five Hundred and No/100ths Dollars ($500.00) in
connection with any breach or default of Lessee under this Lease, whether or not
suit is commenced or judgment entered. Such costs shall include, but not be
limited to: legal fees and costs incurred for the negotiation of a settlement,
enforcement of rights or otherwise. Furthermore, if any action for breach of or
to enforce the provisions of this Lease is commenced, the court in such action
shall award to the party in whose favor a judgment is entered a reasonable sum
as attorneys' fees and costs. Such attorneys' fees and costs shall be paid by
the losing party in such action. Lessee shall also indemnify Lessor against and
hold Lessor harmless from all costs, expenses, demands and liability incurred by
Lessor if Lessor becomes or is made a party to any claim or action (a)
instituted by Lessee, or by any third party against Lessee except where such
claim or action arises out of an occurrence in the common areas of the Complex
and does not allege an act or omission by Lessee or Lessee's agents, employees
or
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contractors; (b) for foreclosure of any lien for labor or material furnished to
or for Lessee or such other person; (c) otherwise arising out of or resulting
from any act or transaction of Lessee or such other person; or (d) necessary to
protect Lessor's interest under this Lease in a bankruptcy proceeding or other
proceeding under Title 11 of the United States Code, as amended. Lessee shall
defend Lessor against any such claim or action at Lessee's expense with counsel
reasonably acceptable to Lessor or, at Lessor's election, Lessee shall reimburse
Lessor for any legal fees or costs incurred by Lessor in any such claim or
action.
In addition, Lessee shall pay Lessor's reasonable attorneys' fees (not to
exceed $500.00) incurred in connection with Lessee's request for Lessor's
consent in connection with any act which Lessee proposed to do and which
requires Lessor's consent and which reasonably requires the review of an
attorney.
Lessee hereby waives all claims by Lessor's reentering and taking
possession of the Premises or removing and storing the property of Lessee as
permitted under this Lease and will save Lessor harmless from all losses, costs
or damages occasioned Lessor thereby. No such reentry shall be considered or
construed to be a forcible entry by Lessor.
ARTICLE XVI. SUBORDINATION: This Lease shall be subject and subordinate to any
mortgage, deed of trust or ground lease now or hereafter placed upon the
Premises, the Complex, the Property or any portion thereof by Lessor or its
successors or assigns, and to amendments, replacements, renewals and extensions
thereof. Lessee agrees at any time hereafter, upon demand to execute and
deliver any instruments, releases or other documents that may be reasonably
required for the purpose of subjecting and subordinating this Lease, as above
provided, to the lien of any such mortgage, deed of trust or ground lease. It
is agreed, nevertheless, that as long as Lessee is not in default in the payment
of Base Rent, Additional Rent, and other charges to be paid by Lessee under this
Lease and the performance of all covenants, agreements and conditions to be
performed by Lessee under this Lease, then neither Lessee's right to quiet
enjoyment under this Lease, nor the right of Lessee to continue to occupy the
Premises and to conduct its business thereon, in accordance with the terms of
this Lease as against any lessor, lessee, mortgagee, trustee or their successors
or assigns shall be interfered with.
The above subordination shall be effective without the necessity of the
execution and delivery of any further instruments on the part of Lessee to
effectuate such subordination. Notwithstanding anything hereinabove contained
in this Article XVI, in the event the holder of any mortgage, deed of trust or
ground lease shall at any time elect to have this Lease constitute a prior and
superior lien to its mortgage, deed of trust or ground lease, then, and in such
event, upon any such holder or landlord notifying Lessee to that effect in
writing, this Lease shall be deemed prior and superior in lien to such mortgage,
deed of trust or ground lease, whether this Lease is dated prior to or
subsequent to the date of such mortgage, deed of trust or ground lease, and
Lessee
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shall execute such attornment agreement as may be reasonably requested by said
holder.
Lessee agrees, provided the mortgagee, ground lessor or trust deed holder
under any mortgage, ground lease, deed of trust or other security instrument
shall have notified Lessee in writing (by the way of a notice of assignment of
lease or otherwise) of its address, that Lessee shall give such mortgagee,
ground lessor, trust deed holder or other secured party ("Mortgagee"),
simultaneously with delivery of notice to Lessor, by registered or certified
mail, a copy of any such notice of default served upon Lessor. Lessee further
agrees that said Mortgagee shall have the right to cure any alleged default
during the same period that Lessor has to cure such default.
ARTICLE XVII. MISCELLANEOUS:
A. Lessee represents that Lessee has dealt directly with and only with
CB Commercial Real Estate Group, Inc. (Mark Krison/Bob Crum) and Colliers Iliff
Thorn (Paul Sieczkowski) (the "Brokers"), as brokers, in connection with this
Lease and insofar as Lessee knows, no other broker negotiated or participated in
negotiations of this Lease or submitted or showed the Premises or is entitled to
any commission in connection therewith. Lessor shall be responsible for paying
the commission due the Brokers on account of this Lease pursuant to a separate
agreement between Lessor and the Brokers.
B. Lessee agrees from time to time, upon not less than fifteen (15)
days prior written request by Lessor, to deliver to Lessor a statement in
writing certifying (i) this Lease is unmodified and in full force and effect (or
if there have been modifications that the Lease as modified is in full force and
effect and stating the modifications); (ii) the dates to which the rent and
other charges have been paid; (iii) Lessor is not in default in any provision of
this Lease or, if in default, the nature thereof specified in detail; (iv) the
amount of monthly rental currently payable by Lessee; (v) the amount of any
prepaid rent, and (vi) such other matters as may be reasonably requested by
Lessor or any Mortgagee or prospective purchaser of the Complex.
If Lessee does not deliver such statement to Lessor within such fifteen
(15) day period, Lessor and any prospective purchaser or encumbrancer of the
Premises or the Complex may conclusively presume and rely upon the following
facts: (i) that the terms and provisions of this Lease have not been changed
except as otherwise represented by Lessor; (ii) that this Lease has not been
cancelled or terminated and is in full force and effect, except as otherwise
represented by Lessor; (iii) that the current amounts of the Base Rent and
security deposit are as represented by Lessor and that any charges made against
the security deposit are uncontested and valid; (iv) that there have been no
subleases or assignments of the Lease; (v) that not more than one month's Base
Rent or other charges have been paid in advance; and (vi) that Lessor is not in
default under the Lease. In such event, Lessee shall be estopped from denying
the truth of such facts.
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C. All notices, demands and requests shall be in writing, and shall be
effectively served by forwarding such notice, demand or request by certified or
registered mail, postage prepaid, or by commercial overnight courier service
addressed as follows:
(i) If addressed to Lessee:
By forwarding such notice, demand or request by certified or
registered mail, postage prepaid, addressed to Lessee at:
P. J. Food Service, Inc.
11460 Bluegrass Parkway
Louisville, Kentucky 40299
Attention: President
or at such other address as Lessee may hereafter designate by
written notice to Lessor, in which case said notice shall be
effective at the time of mailing such notice.
(ii) If addressed to Lessor:
By forwarding such notice, demand or request by certified or
registered mail, postage prepaid, addressed to Lessor at:
Opus Southwest Corporation
c/o Normandale Properties Southwest Corporation
4742 North 24th Street, Suite 100
Phoenix, Arizona 85016
With copy to:
Opus Southwest Corporation
4742 North 24th Street
Suite 100
Phoenix, Arizona 85016
Attn: Thomas W. Roberts, President
With copy to:
Opus U.S. Corporation
P. O. Box 59110
Minneapolis, Minnesota 55440
Attention: Law Department
or at such other address as Lessor and Lessee may hereafter designate by written
notice. The effective date of all notices shall be the time of mailing such
notice or the date of delivery to a commercial overnight courier service.
D. All rights and remedies of Lessor under this Lease or that may be
provided by law may be executed by Lessor in its own name, individually, or in
the name of its agent, and all legal proceedings for the enforcement of any such
rights or remedies, including those set forth in Article XV, may be commenced
and prosecuted to final judgment and execution by Lessor in its own name or in
the name of its agent.
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E. Lessor covenants and agrees that Lessee, upon paying the Base Rent,
Additional Rent and other charges herein provided for and observing and keeping
the covenants, agreements and conditions of this Lease on its part to be kept
and performed, shall lawfully and quietly hold, occupy and enjoy the Premises
during the term of this Lease. Time is of the essence of this Lease and each
and every provision contained herein, and any extension of time granted by
Lessor to Lessee for the performance of any obligation of Lessee under this
Lease shall not be considered an extension of time for the performance of any
subsequent obligation of Lessee under this Lease.
F. The covenants and agreements herein contained shall bind and inure
to the benefit of Lessor and its successors and assigns and Lessee and its
permitted successors and assigns. All obligations of each party constituting
Lessee hereunder shall be the joint and several obligations of each such party.
G. If any term or provision of this Lease shall to any extent be held
invalid or unenforceable, the remaining terms and provisions of this Lease shall
not be affected thereby, but each term and provision of this Lease shall be
valid and enforced to the fullest extent permitted by law. This Lease shall be
construed and enforced in accordance with the laws of the state in which the
Premises are located.
H. Lessee covenants not to do or suffer any waste or damage or
disfigurement or injury to the Premises or the Complex.
I. The term "Lessor" as used in this Lease so far as covenants or
obligations on the part of Lessor are concerned shall be limited to mean and
include only the owner or owners of the Complex at the time in question, and in
the event of any transfer or transfers or conveyances the then grantor shall be
automatically freed and released from all personal liability accruing from and
after the date of such transfer or conveyance as respects the performance of any
covenant or obligation on the part of Lessor contained in this Lease to be
performed, it being intended hereby that the covenants and obligations contained
in this Lease on the part of Lessor shall be binding on the Lessor, its
successors and assigns, only during and in respect to their respective
successive periods of ownership.
In the event of a sale or conveyance by Lessor of the Complex or any part
of the Complex, the same shall operate to release Lessor from any future
liability upon any of the covenants or conditions herein contained and in such
event Lessee agrees to look solely to the responsibility of the successor in
interest of Lessor in and to this Lease. This Lease shall not be affected by
any such sale or conveyance, and Lessee agrees to attorn to the purchaser or
grantee, which purchaser or grantee shall be personally obligated on this Lease
only so long as it is the owner of Lessor's interest in and to this Lease.
J. The marginal or topical headings of the several Articles are for
convenience only and do not define, limit or construe the contents of said
Articles.
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K. All preliminary negotiations are merged into and incorporated in
this Lease, except for written collateral agreements executed contemporaneously
herewith.
L. This Lease can only be modified or amended by an agreement in
writing signed by the parties hereto. No receipt of money by Lessor from Lessee
or any other person after termination of this Lease or after the service of any
notice or after the commencement of any suit, or after final judgment for
possession of the Premises shall reinstate, continue or extend the term of this
Lease or affect any such notice, demand or suit, or imply consent for any action
for which Lessor's consent is required, unless specifically agreed to in writing
by Lessor. Any amounts received by Lessor may be allocated to any specific
amounts due from Lessee to Lessor as Lessor determines, except in the event of a
dispute between Lessor and Lessee as to the appropriate charge, in which event
Lessor shall await resolution of such dispute before allocating such amounts.
M. Lessor shall have the right to temporarily close any portion of the
building area or land area to the extent as may, in Lessor's legal counsel's
reasonable opinion, be necessary to prevent a dedication thereof or the accrual
of any rights to any person or the public therein. Lessor shall at all times
have full control, management and direction of the Complex, subject to the
rights of Lessee in the Premises, and Lessor reserves the right at any time and
from time to time to reduce, increase, enclose or otherwise change the size,
number and location of buildings, layout and nature of the Complex and the other
tenancies, premises and buildings included in the Complex, to construct
additional buildings and additions to any building, and to create additional
rentable areas through use and/or enclosure of common areas, or otherwise, and
to place signs on the Complex, and to change the name, address, number or
designation by which the Complex is commonly known. In exercising the foregoing
rights, Lessor shall use commercially reasonable efforts to minimize any
material adverse impact or the ability of Lessee to conduct its business in the
Premises. No implied easements are granted by this Lease. Lessor shall in no
event be liable for any lack of security in respect to the Complex.
N. Lessee shall permit Lessor (or its designees) to erect, use,
maintain, replace and repair pipes, cables, conduits, plumbing, vents, and
telephone, electric and other wires or other items, in, to and through the
ceiling, floor and walls of the Premises, as and to the extent that Lessor may
now or hereafter deem necessary or appropriate for the proper operation and
maintenance of the Complex. In exercising the foregoing rights, Lessor shall
use commercially reasonable efforts to minimize any material adverse impact or
the ability of Lessee to conduct its business in the Premises.
O. Employees or agents of Lessor have no authority to make or agree to
make a lease or other agreement or undertaking in connection herewith. The
submission of this document for examination does not constitute an offer to
lease, or a reservation of, or option for, the Premises. This document becomes
effective and
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binding only upon the execution and delivery hereof by the proper officers of
Lessor and by Lessee. Lessee confirms that Lessor and its agents have made no
representations or promises with respect to the Premises or the making of or
entry into this Lease except as in this Lease expressly set forth, and Lessee
agrees that no claim or liability shall be asserted by Lessee against Lessor
for, and Lessor shall not be liable by reason of, breach of any representations
or promises not expressly stated in this Lease. This Lease, except for the
Complex Rules and Regulations, in respect to which subparagraph P of this
Article shall prevail, can be modified or altered only by agreement in writing
between Lessor and Lessee, and no act or omission of any employee or agent of
Lessor shall alter, change or modify any of the provisions hereof.
P. Lessee shall perform, observe and comply with the Complex Rules and
Regulations of the Complex as set forth on Exhibit B attached hereto and by this
reference incorporated herein, with respect to the safety, care and cleanliness
of the Premises and the Complex, and the preservation of good order thereon,
and, upon written notice thereof to Lessee, Lessee shall perform, observe and
comply with any changes, amendments or additions thereto as from time to time
shall be established and deemed advisable by Lessor for tenants of the Complex
provided such changes, amendments or additions do not impose additional monetary
burdens or affirmative obligations on Lessee. Lessor shall not be liable to
Lessee for any failure of any other tenant or tenants of the Complex to comply
with such Complex Rules and Regulations.
Q. Lessee shall not use the Premises or permit anything to be done in
or about the Premises which will, in any way, conflict with any law, statute,
ordinance or governmental rule or regulation now in force or which may hereafter
be enacted or promulgated. Lessee shall, at its sole cost and expense, promptly
comply with all laws, statutes, ordinances and governmental rules and
regulations now in force or which may hereafter be in force, and with the
requirements of any fire insurance underwriters or other similar body now or
hereafter constituted relating to or affecting the condition, use or occupancy
of the Premises. Lessee shall use the Premises and comply with any recorded
covenants, conditions, and restrictions affecting the Premises and the Complex
as of the commencement of the Lease or which are recorded during the lease term,
provided that such covenants, conditions and restrictions which are recorded
during the term of the Lease do not materially and substantially interfere
with the ability of Lessee to engage in Lessee's business at the Premises.
R. Lessee shall at all times during the term of this Lease and in all
respects comply with all federal, state and local laws, ordinances and
regulations ("Hazardous Materials Laws") relating to the industrial hygiene,
environmental protection or the use, analysis, generation, manufacture, storage,
presence, disposal or transportation of any oil, petroleum products, flammable
explosives, asbestos, urea formaldehyde, polychlorinated biphenyls, radioactive
materials or waste, or other hazardous, toxic, contaminated or polluting
materials, substances or wastes, including without limitation any "hazardous
substances", "hazardous wastes", "hazardous
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materials" or "toxic substances" under any such laws, ordinances or regulations
(collectively, "Hazardous Materials").
Lessee shall at its own expense procure, maintain in effect and comply
with all conditions of any and all permits, licenses and other governmental and
regulatory approvals required for Lessee's use of the Premises, including,
without limitation, discharge of (appropriately treated) materials or waste into
or through any sanitary sewer system serving the Premises. Except as discharged
into the sanitary sewer in conformity with all applicable Hazardous Materials
Laws, Lessee shall cause any and all Hazardous Materials brought or permitted on
the Premises by Lessee to be removed from the Premises and transported solely by
duly licensed haulers to duly licensed facilities for final disposal of such
Hazardous Materials and wastes. Lessee shall in all respects handle, treat,
deal with and manage any and all Hazardous Materials brought or permitted on the
Premises by Lessee in conformity with all applicable Hazardous Materials Laws
and prudent industry practices regarding the management of such Hazardous
Materials. All reporting obligations relating to such Hazardous Materials to
the extent imposed upon Lessee by Hazardous Materials Laws are solely the
responsibility of Lessee. Upon expiration or earlier termination of this Lease,
Lessee shall cause all Hazardous Materials (to the extent such Hazardous
Materials are generated, stored, released or disposed of during the term of this
Lease by Lessee) to be removed from the Premises and transported for use,
storage or disposal in accordance and in compliance with all applicable
Hazardous Materials Laws. Lessee shall not take any remedial action in response
to the presence of any Hazardous Materials in, on, about or under the Premises
or in any improvements situated on the Complex, nor enter into any settlement
agreement, consent, decree or other compromise in respect to any claims relating
to or in any way connected with the Premises or the Complex without first
notifying Lessor of Lessee's intention to do so and affording Lessor ample
opportunity to appear, intervene or otherwise appropriately assert and protect
Lessor's interest with respect thereto. In addition, at Lessor's request, at
the expiration of the term of this Lease, Lessee shall remove all tanks or
fixtures which were placed on the Premises during the term of this Lease by or
for Lessee and which contain, have contained or are contaminated with, Hazardous
Materials.
Lessee shall immediately notify Lessor in writing of (a) any enforcement,
clean-up, removal or other governmental or regulatory action instituted,
completed or threatened pursuant to any Hazardous Materials Laws; (b) any claim
made or threatened by any person against Lessor, or the Premises, relating to
damage, contribution, cost recovery, compensation, loss or injury resulting from
or claimed to result from any Hazardous Materials; and (c) any reports made to
any environmental agency arising out of or in connection with any Hazardous
Materials in, on or about the Premises or with respect to any Hazardous
Materials removed by Lessee from the Premises, including, any complaints,
notices, warnings, reports or asserted violations in connection therewith.
Lessee shall also provide to Lessor, as promptly as possible, and in any event
within five business days after Lessee first receives or sends the same, copies
of all claims, reports, complaints, notices, warnings or
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asserted violations relating in any way to the Premises or Lessee's use thereof.
Upon written request of Lessor (to enable Lessor to defend itself from any claim
or charge related to any Hazardous Materials Law), Lessee shall promptly deliver
to Lessor notices of hazardous waste manifests reflecting the legal and proper
disposal of all such Hazardous Materials removed or to be removed from the
Premises.
To Lessor's knowledge, Lessor is not aware of any Hazardous Materials
which exist or are located on or in the Premises, except as may be disclosed in
that certain Environmental Site Assessment prepared by Western Technologies,
Inc., dated April 18, 1995, as amended by that certain Stained Soil Report
prepared by Western Technologies, Inc., dated June 20, 1995, and that certain
Supplemental Environmental Report prepared Western Technologies, Inc., dated
September 19, 1995. Further, Lessor represents to Lessee that, to the best of
its knowledge, Lessor has not caused the generation, storage or release of
Hazardous Materials upon the Premises, except in accordance with Hazardous
Materials Laws. In the event (a) Hazardous Materials are discovered upon the
Premises, (b) Lessor has been given written notice of the discovery of such
Hazardous Materials, and (c) pursuant to the provisions of the preceding
paragraphs of this Article XVII.R., neither Lessor nor Lessee is obligated to
pay the cost of compliance with Hazardous Materials Laws, then and in that event
Lessor may voluntarily but shall not be obligated to agree with Lessee to take
all action necessary to bring the Premises into compliance with Hazardous
Materials Laws at Lessor's sole cost. In the event Lessor fails to notify
Lessee in writing within 30 days of the notice to Lessor of the discovery of
such Hazardous Materials that Lessor intends to voluntarily take such action as
is necessary to bring the Premises into compliance with Hazardous Materials
Laws, then Lessee may (i) bring the Premises into compliance with Hazardous
Materials Laws at Lessee's sole cost or (ii) provided such Hazardous Materials
endanger persons or property in, on or about the Premises or interfere with
Lessee's use of the Premises, terminate this Lease on a date not less than
ninety days following written notice of such intent to terminate.
Lessor shall indemnify, defend (with counsel reasonably acceptable to
Lessee), protect and hold Lessee and each of Lessee's officers, directors,
partners, employees, agents, attorneys, successors and assigns free and harmless
from and against any and all claims, liabilities, damages, costs, penalties,
forfeitures, losses or expenses (including attorneys' fees) for death or injury
to any person or damage to any property whatsoever (including water tables and
atmosphere) arising or resulting in whole or in part, directly or indirectly,
from the presence or discharge of Hazardous Materials, in, on, under, upon or
from the Premises, including materials used during construction of the Premises
and the Complex or from the transportation or disposal of Hazardous Materials to
or from the Premises to the extent caused by Lessor whether knowingly or
unknowingly, the standard herein being one of strict liability. Lessor's
obligations hereunder shall include, without limitation, and whether
foreseeable, all cost of any required or necessary repairs, clean-up or
detoxification or decontamination of the Premises, and the presence and
implementation of any closure, remedial
-35-
action or other required plans in connection therewith, and shall survive the
expiration of or early termination of the term of this Lease. For purposes of
the indemnity provided herein, any acts or omissions of Lessor or its employees,
agents, customers, assignees, contractors or sub-contractors (whether or not
they are negligent, intentional, willful or unlawful) shall be strictly
attributable to Lessor.
Lessee shall indemnify, defend (with counsel reasonably acceptable to
Lessor), protect and hold Lessor and each of Lessor's officers, directors,
partners, employees, agents, attorneys, successors and assigns free and harmless
from and against any and all claims, liabilities, damages, costs, penalties,
forfeitures, losses or expenses (including attorneys' fees) for death or injury
to any person or damage to any property whatsoever (including water tables and
atmosphere) arising or resulting in whole or in part, directly or indirectly,
from the presence or discharge of Hazardous Materials, in, on, under, upon or
from the Premises or from the transportation or disposal of Hazardous Materials
to or from the Premises to the extent caused by Lessee whether knowingly or
unknowingly, the standard herein being one of strict liability. Lessee's
obligations hereunder shall include, without limitation, and whether
foreseeable, all cost of any required or necessary repairs, clean-up or
detoxification or decontamination of the Premises, and the presence and
implementation of any closure, remedial action or other required plans in
connection therewith, and shall survive the expiration of or early termination
of the term of this Lease. For purposes of the indemnity provided herein, any
acts or omissions of Lessee or its employees, agents, customers, sub-lessees,
assignees, contractors or sub-contractors (whether or not they are negligent,
intentional, willful or unlawful) shall be strictly attributable to Lessee.
For purposes of the covenants and agreements contained in this Article
XVII.R., inclusive, any acts or omissions of Lessee, its employees, agents,
customers, sublessees, assignees, contractors or sub-contractors (except Opus
Southwest Corporation and its contractors and subcontractors) shall be strictly
attributable to Lessee; any acts or omissions of Lessor, its employees, agents,
customers, assignees, contractors or sub-contractors shall be strictly
attributable to Lessor.
S. All obligations of Lessee hereunder not fully performed as of the
expiration or earlier termination of the term of this Lease shall survive the
expiration or earlier termination of the term hereof, including, without
limitation, all payment obligations with respect to Operating Expenses and Real
Estate Taxes and all obligations concerning the condition of the Premises.
T. Any claim which Lessee may have against Lessor for default in
performance of any of the obligations herein contained to be kept and performed
by Lessor shall be deemed waived unless such claim is asserted by written notice
thereof to Lessor within thirty (30) days of commencement of the alleged default
or of accrual of the cause of action and unless suit be brought thereon within
one (1) year subsequent to the accrual of such cause of action. Furthermore,
Lessee agrees to look solely to Lessor's
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interest in the Complex for the recovery of any judgment from Lessor, it being
agreed that Lessor, or if Lessor is a partnership, its partners whether general
or limited, or if Lessor is a corporation, its directors, officers or share-
holders, shall never be personally liable for any such judgment.
U. Lessee shall furnish to Lessor promptly upon demand, a corporate
resolution, proof of due authorization of partners, or other appropriate
documentation reasonably requested by Lessor evidencing the due authorization of
Lessee to enter into this Lease.
V. This Lease shall not be deemed or construed to create or establish
any relationship or partnership or joint venture or similar relationship or
arrangement between Lessor and Lessee hereunder.
W. Lessee shall in all respects comply with the Americans With
Disabilities Act of 1990 (42 U.S.C. Section 12101 et seq.), as the same may be
amended from time to time (as amended, the "ADA"), and Lessee agrees to
indemnify and save Lessor and its managing agent harmless against and from any
and all claims, loss, damage and expense by or on behalf of any person or
persons, firm or firms, corporation or corporations, arising from any failure or
alleged failure of Lessee to comply with the ADA or arising from any claim made
under the ADA in connection with the Premises, and from and against all costs,
reasonable attorneys' fees, expenses and liabilities incurred in or about any
such claim or action or proceeding brought thereon; in case any action or
proceeding be brought against Lessor or its managing agent by reason of any such
claim, Lessee, upon notice from Lessor, covenants to resist or defend such
action or proceeding by counsel reasonably satisfactory to Lessor.
X. Lessee shall not place, or permit to be placed or maintained, on any
exterior door, wall or window of the Premises any sign, awning or canopy, or
advertising matter or other thing of any kind, and will not place or maintain
any decoration, lettering or advertising matter on the glass of any window or
door, or that can be seen through the glass, of the Premises except as
specifically approved in writing by Lessor. Lessee further agrees to maintain
such sign, awning, canopy, decoration, lettering, advertising matter or thing as
may be approved, in good condition and repair at all times. Lessee agrees at
Lessee's sole cost, that any Lessee sign will be maintained in strict
conformance with Lessor's sign criteria, if any, as to design, material, color,
location, size, letter style, and method of installation.
ARTICLE XVIII. MISCELLANEOUS TAXES: Lessee shall pay, prior to delinquency,
all taxes assessed or levied upon its occupancy of the Premises, or upon the
trade fixtures, furnishings, equipment and all other personal property of Lessee
located in the Premises, and when possible, Lessee shall cause such trade
fixtures, furnishings, equipment and other personal property to be assessed and
billed separately from the property of Lessor. In the event any or all of
Lessee's trade fixtures, furnishings, equipment or other personal property, or
Lessee's occupancy of the Premises, shall be assessed and taxed with the
property of Lessor, Lessee shall pay to Lessor its share of such taxes within
ten (10) days after delivery to
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Lessee by Lessor of a statement in writing setting forth the amount of such
taxes applicable to Lessee's personal property.
ARTICLE XIX. OTHER PROVISIONS: The following are made a part hereof, with the
same force and effect as if specifically set forth herein:
A. Site Plan - Exhibit A.
B. Complex Rules and Regulations - Exhibit B.
C. Rider to Warehouse Lease - Exhibit C.
D. Space Plan/Building Elevation - Exhibit D.
E. Guarantee From Papa John's International, Inc. - Exhibit E.
IN WITNESS WHEREOF, the parties have executed this Lease as of the day and
year first above written.
LESSOR: LESSEE:
OPUS SOUTHWEST CORPORATION, P.J. FOOD SERVICE, INC.,
a Minnesota corporation a Kentucky corporation
By /s/ Thomas W. Roberts By /s/ Robert J. Wadell
---------------------------- --------------------------------
Thomas W. Roberts Its President
Its President
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EXHIBIT A
SITE PLAN
Exhibit A
(Page 1 of 1)
EXHIBIT B
COMPLEX RULES AND REGULATIONS
1. Any sign, lettering, picture, notice or advertisement installed on
or in any part of the Premises and visible from the exterior of the Complex, or
visible from the exterior of the Premises, shall be installed at Lessee's sole
cost and expense, and in such manner, character and style as Lessor may approve
in writing. In the event of a violation of the foregoing by Lessee, Lessor may
remove the same without any liability and may charge the expense incurred by
such removal to Lessee.
2. No awning or other projection shall be attached to the outside walls
of the Complex. No curtains, blinds, shades or screens visible from the
exterior of the Complex or visible from the exterior of the Premises shall be
attached to or hung in, or used in connection with, any window or door of the
Premises without the prior written consent of Lessor. Such curtains, blinds,
shades, screens or other fixtures must be of a quality, type, design and color,
and attached in the manner, approved by Lessor.
3. Lessee and its servants, employees, customers, invitees and guests
shall not obstruct sidewalks, entrances, passages, corridors, vestibules, halls,
elevators or stairways in and about the Complex which are used in common with
other tenants and their servants, employees, customers, guests and invitees and
which are not a part of the Premises of Lessee. Lessee shall not place objects
against glass partitions or doors or windows which would be unsightly from the
Complex corridors or from the exterior of the Complex and will promptly remove
any such objects upon notice from Lessor.
4. Lessee shall use its best efforts not to make excessive noises,
cause disturbances or vibrations or use or operate any electrical or mechanical
devices that emit excessive sound or other waves or disturbances, and Lessee
shall not create obnoxious odors (including cigarette, cigar and pipe smoke),
any of which may be offensive to the other tenants and occupants of the Complex,
or that would interfere with the operation of any device, equipment, radio,
television broadcasting or reception from or within the Complex or elsewhere
and shall not place or install any projections, antennas, aerials or similar
devices inside or outside of the Premises or on the Complex.
5. Lessee shall not waste electricity, water or air conditioning and
shall cooperate fully with Lessor to insure the most effective operation of the
Complex's heating and air conditioning systems.
6. Lessee assumes full responsibility for protecting its space from
theft, robbery and pilferage, which includes keeping doors locked and other
means of entry to the Premises closed and secured after normal business hours.
Exhibit B
(Page 1 of 4)
7. In no event shall Lessee bring into the Complex inflammables, such
as gasoline, kerosene, naphtha and benzine, or explosives or any other article
of intrinsically dangerous nature. If, by reason of the failure of Lessee to
comply with the provisions of this subparagraph, any insurance premium for all
or any part of the Complex shall at any time be increased, Lessee shall make
immediate payment of the whole of the increased insurance premium, without
waiver of any of Lessor's other rights at law or in equity for Lessee's breach
of this Lease.
8. Lessee shall comply with all applicable federal, state and municipal
laws, ordinances and regulations and building rules and shall not directly or
indirectly make any use of the Premises which may be prohibited by any of the
foregoing or which may be dangerous to persons or property or may increase the
cost of insurance or require additional insurance coverage.
9. Lessor shall have the right to prohibit any advertising by Lessee
relating to Lessee's commissary to be operated in the Premises which in Lessor's
reasonable opinion tends to impair the reputation of the Complex or its
desirability as a warehouse complex for warehouse use and other uses, and upon
written notice from Lessor, Lessee shall refrain from or discontinue such
advertising.
10. The Premises shall not be used for lodging, sleeping or for any
immoral or illegal purpose.
11. Lessee and Lessee's servants, employees, agents, visitors and
licensees shall observe faithfully and comply strictly with the foregoing rules
and regulations and such other and further appropriate and reasonable rules and
regulations as Lessor or Lessor's agent may from time to time adopt; provided,
however, that Lessee shall not be obligated to comply with any rules and
regulations adopted after the date of this Lease to the extent same would
prohibit Lessee from engaging in the uses permitted by this Lease. Reasonable
notice of any additional rules and regulations shall be given in such manner as
Lessor may reasonably elect.
12. Unless expressly permitted by Lessor, no additional locks or similar
devices shall be attached to any exterior door or window and no keys other than
those provided by Lessor shall be made for any exterior door. If more than two
keys for one lock are desired by Lessee, Lessor may provide the same upon
payment by Lessee. Upon termination of this Lease or of the Lessee's
possession, Lessee shall surrender all keys of the Premises and shall explain to
Lessor all combination locks on safes, cabinets and vaults.
13. Any carpeting cemented down by Lessee shall be installed with a
releasable adhesive. In the event of a violation of the foregoing by Lessee,
Lessor may charge the expense incurred by such removal to Lessee.
14. The water and wash closets, drinking fountains and other plumbing
fixtures shall not be used for any purpose other than those for which they were
constructed, and no sweepings, rubbish, rags, coffee grounds or other substances
shall be thrown therein. All damages resulting from any misuse of the fixtures
shall be
Exhibit B
(Page 2 of 4)
borne by the lessee who, or whose servants, employees, agents, visitors or
licensees, shall have caused the same. No person shall waste water by
interfering or tampering with the faucets or otherwise.
15. No electric circuit for any purpose shall be brought into the leased
premises without Lessor's written permission specifying the manner in which same
may be done.
16. No dog or other animal shall be allowed in offices, halls, corridors
or elsewhere in the Complex.
17. Lessee shall not throw anything out of the door or windows or down
any passageways or elevator shafts.
18. All loading, unloading, receiving or delivery of goods, supplies or
disposal of garbage or refuse shall be made only through entryways and freight
elevators provided for such purposes and indicated by Lessor. Lessee shall be
responsible for any damage to the Complex or the property of its employees or
others and injuries sustained by any person whomsoever resulting from the use or
moving of such articles in or out of the leased premises, and shall make all
repairs and improvements required by Lessor or governmental authorities in
connection with the use of such articles.
19. Lessee shall be responsible for any damage to the Complex or the
property of its employees or others and injuries sustained by any person
whomsoever resulting from the use or moving of heavy articles in or out of the
Premises, and shall make all repairs and improvements required by Lessor or
governmental authorities in connection with the use or moving of such articles.
20. Canvassing, soliciting and peddling in the Complex is prohibited and
all tenants of the Complex shall cooperate to prevent the same.
21. Vending machines shall not be installed without permission of
Lessor; provided, however, Lessor consents to the installation of vending
machines in the pantry or kitchen area of the Premises for the dispensing of
soda and other similar drinks to Lessee's employees and guests.
22. Canvassing, soliciting and peddling in the Complex is prohibited and
each Lessee shall cooperate to prevent the same.
23. Wherever in these Complex Rules and Regulations the word "Lessee"
occurs, it is understood and agreed that it shall mean Lessee and Lessee's
associates, agents, clerks, servants and visitors. Wherever the word "Lessor"
occurs, it is understood and agreed that it shall mean Lessor and Lessor's
assigns, agents, clerks, servants and visitors.
24. Lessor shall have the right to enter upon the leased premises at all
reasonable hours for the purpose of inspecting the same.
Exhibit B
(Page 3 of 4)
25. Lessor shall have the right to enter the leased premises at hours
convenient to Lessee for the purpose of exhibiting the same to prospective
tenants within the sixty (60) day period prior to the expiration of this Lease,
and Lessor may place signs advertising the leased premises for rent on the
windows and doors of said Premises at any time within said sixty (60) day
period.
26. Lessee and its servants, employees, customers, invitees and guests
shall, when using the common parking facilities, if any, in and around the
Complex, observe and obey all signs regarding fire lanes and no parking zones,
and when parking always park between the designated lines. Lessor reserves the
right to tow away, at the expense of the owner, any vehicle which is im-
properly parked or parked in a no parking zone. All vehicles shall be parked at
the sole risk of the owner, and Lessor assumes no responsibility for any damage
to or loss of vehicles. No vehicles shall be parked overnight, except to the
extent such vehicles are driven by employees of Lessee and such employees are
working in the Premises at such time as said vehicles are parked overnight.
27. In case of invasion, mob, riot, public excitement, or other
commotion, Lessor reserves the right to prevent access to the Complex during the
continuance of the same by closing the doors or otherwise, for the safety of the
tenants or the protection of the Complex and the property therein. Lessor shall
in no case be liable for damages for any error or other action taken with regard
to the admission to or exclusion from the Complex of any person.
28. All entrance doors to the Premises shall be locked when the Premises
are not in use. All corridor doors shall also be closed during times when the
air conditioning equipment in the Complex is operating so as not to dissipate
the effectiveness of the system or place an overload thereon.
29. Lessor reserves the right at any time and from time to time to
rescind, alter or waive, in whole or in part, any of these Rules and Regulations
when it is deemed necessary, desirable, or proper, in Lessor's judgment, for its
best interest or for the best interest of the tenants of the Complex.
30. Smoking shall be permitted only in the smoking areas located outside
of the building, as designated and redesignated from time to time by Lessor, and
Lessee and its servants, employees, customers, invitees and guests shall not
smoke anywhere at the Complex (other than the smoking areas designated by
Lessor), including without limitation Lessee's Premises and the sidewalks,
entrances, passages, corridors, halls, elevators and stairways of the Complex.
Initials:
Lessor_________
Lessee_________
Exhibit B
(Page 4 of 4)
EXHIBIT C
RIDER TO LEASE
ARTICLE XX. LOCK BOX: Lessor may from time to time designate a lock box
collection agent for the collection of rents or other charges due Lessor. In
such event, the payment made by Lessee to the lock box shall be the date of
receipt by the lock box collection agent of such payment (or the date of
collection of any such sum if payment is made in the form of a negotiable
instrument thereafter dishonored upon presentment); however, for the purpose of
this Lease, no such payment or collection shall be deemed a waiver by Lessor of
any breach by Lessee of any term, covenant or condition of this Lease nor a
waiver of any of Lessor's rights or remedies and any payment of amounts other
than that deemed due and proper by Lessor shall not prejudice Lessor in any
manner nor constitute a waiver and Lessor shall hereby be authorized to retain
the proceeds of any payments by Lessee, whether restrictively endorsed or
otherwise, and apply same to the amounts due and payable from Lessee under this
Lease without waiver.
ARTICLE XXI. PRIOR PROPOSALS: All prior proposals in respect to this Lease are
hereby terminated.
ARTICLE XXII. CONFIDENTIALITY: Lessee agrees to keep this Lease and the terms
hereof in confidence, and not to publish or disclose, in whole or in part, the
same without Lessor's prior written consent, which consent may be withheld in
Lessor's sole discretion.
ARTICLE XXIII. TENANT IMPROVEMENTS: Lessor shall provide the base building
improvements and a tenant improvement allowance (the "Tenant Improvement
Allowance") equal to Fifty Thousand Eight Hundred Seventy-Two and No/100ths
Dollars ($50,872.00). All additional improvements to the base building will be
so-called "Tenant Improvements" to be installed by Lessor but to be selected by
Lessee as hereinafter set forth and paid for by Lessee subject to Lessor
providing the Tenant Improvement Allowance (as hereinafter defined). Lessee
acknowledges and agrees that items to be paid for by Lessee from the Tenant
Improvement Allowance include the cost of space planning, construction document
preparation, the cost of the design work and construction drawing work, all
costs of obtaining permits, and reimbursables, and the cost of one-half (1/2) of
the demising wall to be constructed in the building of which the Premises are a
part. If the price of the Tenant Improvements exceeds the Tenant Improvement
Allowance, Lessee shall pay Lessor, in cash, upon substantial completion of the
Tenant Improvements, the amount by which the price of the Tenant Improvements
exceeds the Tenant Improvement Allowance.
On or before September 20, 1996, Lessee shall provide to Lessor a space
plan of the Tenant Improvements which Lessee desires for Lessor to construct,
which space plan shall be subject to Lessor's approval and shall be adequate for
the preparation by Lessor of working drawings for construction of such Tenant
Improvements. Such space plan shall show in reasonable detail the design and
appearance of the tenant finishing materials to be used in the
Exhibit C
(Page 1 of 5)
construction thereof, and such other detail or description as may be necessary
to adequately outline the scope of the Tenant Improvements. Lessee shall be
responsible for Lessor's costs (including lost rent) arising out of delays in
completing the Tenant Improvements caused by Lessee. Lessee also agrees to
refrain from ordering long lead time items which would delay substantial
completion of the Tenant Improvements. Lessee acknowledges that any air com-
pressors to be installed either on the interior or the exterior of the Premises
by Lessor or Lessee shall be subject to the prior written consent of Lessor.
ARTICLE XXIV. FINANCIAL STATEMENTS: Lessee agrees to provide to Lessor upon
Lessee's execution of this Lease and prior to Lessor executing same, and within
thirty (30) days after Lessor's request therefor in connection with a proposed
sale or refinancing of the Complex, complete, accurate up-to-date financial
statements prepared according to generally accepted accounting principles
consistently applied, certified by Lessee's chief financial officer, that same
are a true, complete and correct statement of the financial condition of Lessee
as of the date of such financial statements. Lessor shall use commercially
reasonable efforts to disclose such information only to such parties as Lessor
deems reasonably necessary in connection with any such proposed sale or
refinancing.
ARTICLE XXV. SECURITY DEPOSIT: Lessee hereby deposits with Lessor in cash the
sum of Eight Thousand One Hundred Thirty-nine and 52/100ths Dollars ($8,139.52),
Lessor's estimate of one month's Base Rent, the receipt of which is hereby
acknowledged, as and for a security deposit for the full and faithful
performance by Lessee of each and every term, covenant and condition of this
Lease. In the event that Lessee defaults in respect to any of the terms,
provisions, covenants and conditions of this Lease, including, but not limited
to, the payment of any rentals or other charges or items to be paid or provided
for by Lessee, Lessor may use, apply or retain the whole or any part of the
security so deposited for the payment of any such rentals in default or for any
other sum which Lessor may expend or be required to expend by reason of Lessee's
default, including, but not limited to, any damages or deficiency in the
reletting of the Premises, whether such damages or deficiency may accrue before
or after reentry by Lessor. Lessee shall not be entitled to any interest on the
security deposit. It is expressly understood and agreed that such deposit is
not an advance rental deposit or a measure of Lessor's damages in case of
Lessee's default. Upon application of any part of the deposit by Lessor as
provided herein, Lessee shall pay to Lessor on demand the amount so applied in
order to restore the security deposit to its original amount. Any application
of the deposit by Lessor shall not be deemed to have cured Lessee's default by
reason of which the application is made.
In the event of a bona fide sale of the building of which the Premises are
a part (the "Building"), Lessor shall have the right to transfer the security
deposit to its vendee for the benefit of Lessee and thereafter Lessor shall be
released of all liability for the return of such deposit and Lessee agrees to
look to said vendee for the return of its security deposit. It is agreed that
this
Exhibit C
(Page 2 of 5)
provision shall apply to every transfer or assignment made of the security
deposit to any new landlord.
This security deposit shall not be assigned or encumbered by Lessee. It
is expressly understood that the reentry of the Premises by Lessor for any
default on the part of Lessee prior to the expiration of the term of this Lease
shall not be deemed a termination of this Lease so as to entitle Lessee to
recover the security deposit, and the security deposit shall be retained and
remain in the possession of Lessor until the end of the term of this Lease.
Actions by Lessor against Lessee for breach of this Lease shall in no way
be limited or restricted by the amount of the security deposit and resort to
such deposit shall not waive any other rights or constitute an election of
remedies which Lessor may have.
ARTICLE XXVI. ADDITIONAL DEVELOPMENT: Lessor and Lessee understand and agree
that the Complex as constructed is a part of an integrated commercial real
estate development ("Phase I"), to which additional phases may be added by
Lessor (the second phase is hereinafter referred to as "Phase II," and the third
phase is hereinafter referred to as "Phase III"). At any time during the term
hereof, the Complex for purposes of this Lease may, at Lessor's option, include
one or more of the three existing buildings currently constructed on Phase I and
all easement areas appurtenant thereto, and all buildings, improvements and
personal property of Lessor used in connection with the operation or maintenance
thereof located therein and thereon and the appurtenant parking facilities.
Additionally, upon substantial completion of Phase II and/or Phase III, the
Complex for purposes of this Lease may, at Lessor's option, include all of the
land within Phase II and/or Phase III and all easement areas appurtenant
thereto, and all buildings, improvements and personal property of Lessor used in
connection with the operation or maintenance thereof located therein and
thereon and the appurtenant parking facilities.
Upon the election of Lessor, the Property shall thereafter be deemed to
mean that portion of the land (and all easement areas appurtenant thereto) on
which that portion of Phase I elected by Lessor to be included in the Complex is
located; and the Complex as that term is used herein shall be deemed to mean all
buildings and improvements and personal property of Lessor used in connection
with the operation or maintenance thereof and appurtenant parking facilities.
Upon substantial completion of Phase II and the election of Lessor, the
Property shall thereafter be deemed to mean the land (and all easement areas
appurtenant thereto) on which both Phase I and Phase II are located; and the
Complex as that term is used herein shall be deemed to mean all buildings and
improvements and personal property of Lessor used in connection with the
operation or maintenance thereof and appurtenant parking facilities located on
the existing development and Phase II.
Upon substantial completion of Phase III and the election of Lessor, the
Property shall thereafter be deemed to mean the land (and all easement areas
appurtenant thereto) on which Phase I,
Exhibit C
(Page 3 of 5)
Phase II and/or Phase III are located; and the Complex as that term is used
herein shall be deemed to mean all buildings and improvements and personal
property of Lessor used in connection with the operation or maintenance thereof
and appurtenant parking facilities located on the existing development, Phase II
and/or Phase III.
If Lessor so elects, redefinition of the terms "Property" and "Complex" as
hereinabove described (and upon substantial completion of Phase II with respect
to Phase II and upon substantial completion of Phase III with respect to Phase
III), the percentage set forth as "Lessee's Pro Rata Share of Real Estate Taxes"
and "Lessee's Pro Rata Share of Operating Expenses" in Article II.D. herein,
shall be recomputed on the basis of the rentable area of the Premises compared
to the rentable area of the Complex (as expanded).
In no event shall this Article be deemed to required Lessor to develop or
construct Phase II or Phase III (nor require Lessor to combine any portions of
Phase I and/or Phase II and/or Phase III as hereinabove allowed) or any addition
or modification to the Complex (as originally defined herein or otherwise), nor
is this intended in any manner to be a representation or warranty that Phase II
and/or Phase III will at any time be constructed or developed by Lessor. Lessor
shall retain the right to increase or decrease the size of the existing
development or Phase II and/or Phase III and make other changes to the Property
and the legal description of the Complex in its sole discretion.
ARTICLE XXVII. RIGHT TO EXAMINE BOOKS AND RECORDS OF LESSOR: Lessor hereby
agrees, at Lessee's request, to make available to Lessee for its inspection and
examination all of the books and records that relate to Lessor's statement as to
Lessee's Pro Rata Share of Excess Real Estate Taxes and Lessee's Pro Rata Share
of Excess Operating Expenses. Lessor also agrees to make the aforementioned
books and records available to a certified public accountant, selected by
Lessee, for review and audit if Lessee so elects.
ARTICLE XXVIII. CONTINUOUS OPERATIONS: Nothing contained in this Lease shall
be construed as an obligation for Lessee to open or operate its business in the
Premises. Lessee shall have the right to remove all of Lessee's personal
property and cease operations in the Premises at any time and at Lessee's sole
discretion. However, the right to cease to operate its business shall not
affect Lessee's obligations to pay all amounts due hereunder and to perform all
other covenants and obligations hereunder. Notwithstanding the foregoing, if
Lessee ceases to operate its business in the Premises for a period in excess of
ninety (90) days and such failure is not due to damage, casualty, or
condemnation, Lessor shall have the right to terminate this Lease and recapture
the possession of the Premises by delivering written notice of same to Lessee.
All of Lessee's obligations under this Lease accruing from and after the date of
such termination shall terminate upon the recapture of the Premises by Lessor
under this Article.
ARTICLE XXIX. GUARANTEE: Lessee acknowledges that Lessor would not lease the
Premises to Lessee without this Lease being guaran-
Exhibit C
(Page 4 of 5)
teed by Papa John's International, Inc., a Delaware corporation. Lessee agrees
to cause said corporation to execute and deliver to Lessor, simultaneously with
execution and delivery of this Lease, the Guarantee in the form of Exhibit E
attached hereto and by this reference incorporated herein.
ARTICLE XXX. FIXTURIZATION PERIOD: Lessor shall permit Lessee, during the
thirty (30) day period prior to the commencement date of this Lease, to commence
installing Lessee's furniture, fixtures and equipment in the Premises; provided,
however, that Lessee shall not interfere with any Tenant Improvement work then
being completed by Lessor, and provided further, however, that Lessee shall not
commence doing business in the Premises during such thirty-day period. During
such early move-in period, Lessee agrees to comply with all provisions of this
Lease (except for the provisions relating to the payment of rent, which shall
not become effective until the commencement date of this Lease). Prior to
entering the Premises during such early move-in period, Lessee agrees that all
insurance required to be maintained by Lessee under Article VI of this Lease
shall be in full force and effect, and Lessee agrees to deliver certificates of
insurance to Lessor evidencing such insurance. All improvements, alterations,
additions and installations made by Lessee prior to the commencement date of
this Lease shall be made in strict compliance with the provisions of Article
VIII of this Lease.
ARTICLE XXXI. PARKING: Lessor shall provide sufficient standard vehicular
parking spaces on the Property so as to allow Lessee to utilize up to a maximum
of twenty-nine (29) such spaces.
Initials:
Lessor _____________
Lessee _____________
Exhibit C
(Page 5 of 5)
EXHIBIT E
GUARANTEE
This is a guarantee of a lease dated as of ____________, 1996 (the
"Lease"), by and between OPUS SOUTHWEST CORPORATION, a Minnesota corporation,
hereinafter called "Lessor", and P.J. FOOD SERVICE, INC., a Kentucky
corporation, hereinafter called "Lessee", concerning that certain premises to be
constructed upon a portion of the retail shopping complex commonly known as
Kyrene Business Park located north of the northwest corner of Kyrene Road and
Elliot Road, City of Tempe, County of Maricopa, State of Arizona.
FOR VALUE RECEIVED, and in consideration for, and as an inducement
to Lessor to enter into the foregoing Lease, the undersigned hereby guarantees
to Lessor and its successors and assigns the payment of all rentals specified
thereunder and all other payments to be made by Lessee under the Lease, and the
full performance and observance by Lessee of all the terms, covenants,
conditions and agreements therein provided to be performed and observed by
Lessee for which the undersigned shall be jointly and severally liable with
Lessee, without requiring any notice of nonpayment, nonperformance or
nonobservance, or proof of notice or demand, whereby to charge the undersigned,
all of which the undersigned does hereby expressly waive, and the undersigned
expressly agrees that the Lessor and its successors and assigns may proceed
against the undersigned, before, after or simultaneously with the proceedings
against the Lessee for default, and that this Guarantee shall not be terminated,
affected or impaired in any way or manner whatsoever by reason of the assertion
by Lessor against Lessee of any of the rights or remedies reserved to Lessor
pursuant to the provisions of the Lease, or by reason of summary or other
proceedings against Lessee, or by the omission of Lessor to enforce any of its
rights against Lessee or by reason of any extensions of time or indulgences
granted by Lessor to Lessee. The undersigned further covenants and agrees (i)
that the undersigned will be bound by all of the provisions, terms, conditions,
restrictions and limitations contained in the Lease, the same as though the
undersigned was named therein as Lessee; and (ii) that this Guarantee shall be
absolute and unconditional and shall remain and continue in full force and
effect as to any renewal, extension, amendment, addition, assignment, sublease,
transfer or other modification of the Lease, whether or not the undersigned
shall have any knowledge or have been notified of or agreed or consented to any
such renewal, extension, amendment, addition, assignment, sublease, transfer or
other modification of the Lease, and the undersigned agrees to be bound by any
and all modifications to the Lease. If Lessor at any time is compelled to take
any action or proceeding in court or otherwise to enforce or compel compliance
with the terms of this Guarantee, the undersigned shall, in addition to any
other rights and remedies to which the Lessor may be entitled hereunder or as a
matter of law or in equity, be obligated to pay all costs, including attorneys'
fees, incurred or expended by Lessor in connection therewith. Further, the
undersigned hereby covenants and agrees to assume the Lease and to perform all
of the terms and conditions thereunder for the balance of the original term
should the Lease be disaffirmed by
Exhibit "E"
(Page 1 of 3)
any Trustee in Bankruptcy for Lessee, or at the option of Lessor, the
undersigned shall, in the event of Lessee's bankruptcy, make and enter into a
new lease which shall be in form and substance identical to the Lease. All
obligations and liabilities of the undersigned pursuant to this Guarantee shall
be binding upon the heirs, legal representatives, successors and assigns of the
undersigned, and the undersigned and its heirs, legal representatives,
successors and assigns shall remain fully liable under the Lease and this
Guarantee regardless of any merger, corporate reorganization or restructuring
involving Lessee regardless of the resulting organization, structure or
ownership of Lessee. This Guarantee shall be governed by and construed in
accordance with the laws of the State of Arizona.
The undersigned hereby unconditionally consents and agrees that any
legal action brought under this Guarantee may be brought in any State Court of
the State of Arizona or in a Federal United States Court in Arizona and the
undersigned hereby unconditionally consents to the jurisdiction of such courts
in connection with any cause of action brought by or against Lessee and/or
Guarantor(s) in any way directly or indirectly related to the aforementioned
Lease or this Guarantee. Further, each Guarantor hereby irrevocably and
unconditionally appoints P. J. Food Service, Inc., a Kentucky corporation
(Lessee), and the lessee under the Lease if another party shall be the lessee
under the Lease, as its duly authorized agent(s) for the service of process in
connection with any such cause of action, either of which may be considered a
fully authorized agent for service of process. Nothing herein shall prevent
Lessor from serving process in any other manner permitted by law.
The liability of the undersigned shall not be affected or impaired
by any full or partial release of, settlement with, or agreement not to sue,
Lessee or any other guarantor or other person liable in respect of the Lease,
which Lessor is expressly authorized to do, omit or suffer from time to time,
without notice to or approval by the undersigned. The singular herein shall
include the plural and the plural shall include the singular when referring to
the undersigned.
The Guarantor hereby waives the applicability and the benefits of
Arizona Revised Statutes Section 12-1641 and Section 12-1642 and Arizona Rules
of Civil Procedure 17(f).
At any time that Lessee is required to furnish a certificate
pursuant to the Lease, the undersigned, by guarantying the terms and conditions
of the Lease, agree that Guarantor, upon twenty (20) days prior written request
to Lessee, shall certify (by written instrument, duly executed, acknowledged and
delivered to Lessor and to any third person designated by Lessor in such
request) that such person concurs with the statements set forth in said
certificate by Lessee and that the guarantee of such person remains in full
force and effect as to all obligations of Lessee under the Lease. Failure to
deliver such certificate to Lessor (and any such designated third party) within
such twenty (20) day period shall constitute automatic approval of the requested
certificate as though such certificate had been fully executed and
Exhibit "E"
(Page 2 of 3)
delivered by such Guarantor to Lessor and such designated third party.
IN WITNESS WHEREOF, the undersigned has executed this Guarantee as
of the ____ day of _____________, 1996.
GUARANTOR:
PAPA JOHN'S INTERNATIONAL, INC., a
Delaware corporation
By: NOT FOR SIGNATURE-EXHIBIT ONLY
------------------------------
Its: _________________________
INITIALS:
Lessee_________
Lessor_________
Exhibit "E"
(Page 3 of 3)