Exhibit 10.28
S U B L E A S E A G R E E M E N T
FOR
ROTTERDAM INDUSTRIAL PARK
ROTTERDAM, NEW YORK
BETWEEN
DISTRIBUTION UNLIMITED, INC.
ROTTERDAM INDUSTRIAL PARK
BUILDING 6
ROTTERDAM, NEW YORK 12306
AND
P.J. FOOD SERVICE, INC.
11460 BLUEGRASS PARKWAY
LOUISVILLE, KENTUCKY 40299
TABLE OF CONTENTS
PARAGRAPH PAGE
- --------- ----
TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RENTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
CONDITION OF PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . 1
UTILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ADDITIONAL RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SERVICES - ADDITIONAL RENT . . . . . . . . . . . . . . . . . . . . . . . 4
USE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
REPAIRS AND MAINTENANCE . . . . . . . . . . . . . . . . . . . . . . . . . 6
ALTERATIONS AND LIENS . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ENTRY AND INSPECTION . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SUBLETTING AND ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . 7
LIABILITY AND INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . 9
ABANDONMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
HOLDING OVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
DESTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
CONDEMNATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SALE OF PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ESTOPPEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SIGNS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ENTIRE AGREEMENT, WAIVER . . . . . . . . . . . . . . . . . . . . . . . . 13
NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
FINANCIALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ANCILLARY FACILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECURITY BARRIERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
MASTER LEASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
NOTICE OF SUBLEASE EXTENSION . . . . . . . . . . . . . . . . . . . . . . 14
ENVIRONMENTAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . 14
RENEWAL OPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
CONSUMER PRICE INDEX . . . . . . . . . . . . . . . . . . . . . . . . . . 15
BROKERAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ELECTRICITY RATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SUBLESSEE'S FIT-UP . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
GUARANTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
EXHIBIT A - RENTAL AND TERM SCHEDULE . . . . . . . . . . . . . . . . . . 18
EXHIBIT B - REFURBISHING REQUIREMENTS . . . . . . . . . . . . . . . . . . 19
EXHIBIT C - SUBLESSEE'S SPECS . . . . . . . . . . . . . . . . . . . . . . 20
EXHIBIT D - SITE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SUBLEASE AGREEMENT
THIS SUBLEASE made this _____ day of September, 1996, between Distribution
Unlimited, Inc., Rotterdam Industrial Park, Building 6, Rotterdam, New York
12306, hereinafter referred to as the "Sublessor" and P.J. Food Service, Inc., a
Delaware corporation which has a business office at 11460 Bluegrass Parkway,
Louisville, Kentucky 40299, hereinafter referred to as the "Sublessee".
WITNESSETH that the Sublessor hereby subleases to the Sublessee and the
Sublessee hereby hires and takes from the Sublessor those premises described as
Bay 4, Building 14 located in Rotterdam Industrial Park, Town of Rotterdam,
County of Schenectady, State of New York, hereinafter referred to as the
"Demised Premises", as shown on the map attached hereto and made a part hereof,
as Exhibit "D"; said Demised Premises being 40,420 square feet as measured in
accordance with the BOMA Standard Method of Measurement, American National
Standard Section Z65.1, which states that the rentable area of a floor shall be
computed by measuring to the center of the dominant portion of the permanent
outer buildings walls, and Sublessor hereby grants to Sublessee its guests,
invitees and licensees all easements, rights and privileges appurtenant thereto
including the right to use adjoining parking areas, driveways, roads, alleys,
means of ingress and egress and other portions of the other areas ("Common
Areas") in common use by owners or lessees of the Rotterdam Industrial Park and
Sublessor agrees that it will not, during the term of this Sublease, alter those
portions of the Common Areas shown in yellow on Exhibit "D" so as to materially
and adversely affect ingress and egress to and from the Demised Premises or
parking adjacent to the Demised Premises. The foregoing subleasing shall be
upon the terms and conditions hereinafter set forth, and the Sublessee does
hereby covenant with the Sublessor as follows:
1. TERM: The initial term of this Sublease shall be for a period of
approximately four (4) years and eleven (11 ) months commencing on the
earlier to occur of (i) January 31, 1997 or (ii) the date that Sublessee
first commences normal business operations in any portion of the Demised
Premises (the earlier of such two dates being hereinafter referred to as
the "Term Commencement Date") and ending December 31, 2001 ("Initial
Term"). Commencing September 8, 1996, Sublessee shall be entitled to
enter upon the Demised Premises for the purpose of making same ready for
Sublessee's use.
2. RENTAL: Commencing with the date Sublessee first enters the Demised
Premises, Sublessee shall be responsible for the payment of all utility
costs and Common Area charges allocable to the Demised Premises. As
rental for the Demised Premises for the Initial Term the Sublessee hereby
agrees to pay the Sublessor without deduction, setoff, prior notice or
demand the sums as outlined in Exhibit A Rental and Term Schedule, in
advance on the Term Commencement Date (to the extent of any partial
month's rent due because the Term Commencement Date is not the first day
of a calendar month) and thereafter on the first day of each and every
month, said rental to be paid to the Sublessor by good check mailed to
Sublessor at c/o Northeastern Industrial Park, P.O. Box 98, Guilderland
Center, New York 12085 or delivered to Sublessor's offices at Building 6,
East Road, Rotterdam Industrial Park, Schenectady, New York, or at such
other place or places as the Sublessor may from time to time direct.
Sublessee shall pre-pay the first full month's rent and last months'
rental at Sublease signing. The Sublessee shall pay a "late charge" of
two (2%) percent per month from the due date of any installment of rental
(Fixed Minimum, or other as may be construed as rent) if said rental
payment is made after its due date. Nothing herein contained shall be
deemed to limit any right or remedy which the Sublessor may have under
this Sublease, at law or in equity.
3. CONDITION OF PREMISES: The Sublessee covenants that the Sublessee has
examined the Demised Premises, knows the condition thereof and
acknowledges that the same are accepted "as is", subject to the warranties
as set forth hereafter
and subject to the conditions as set forth on Exhibit "B" attached hereto,
which are conditions precedent to Sublessee's acceptance of the Demised
Premises and obligations to perform any terms herein. Sublessee shall
comply with the requirements of the Occupational Safety and Health Act of
1970 and all other applicable laws relating to occupational safety and
health and rules and regulations promulgated thereunder, and the Sublessee
shall further comply with all laws, rules and regulations of the State of
New York and any department agency, board, or political sub-division of
the State pertaining to building construction or safety applicable to
either the Sublessee or the Sublessor and shall hold the Sublessor
harmless therefrom. Nothing herein shall be construed as preventing the
Sublessor from taking such action as it shall deem necessary for the
protection of its interests in respect to any order, decree, judgment or
other act of any Federal or State department, agency or board.
4. UTILITIES: The Sublessor or the local public utility shall provide and
maintain the necessary mains, ducts and conduits in order to bring water,
electricity and natural gas service to the Demised Premises and to carry
sewage therefrom in accordance with Sublessee's specifications as set
forth on Exhibit "C" attached hereto any made a part hereof. All means of
distribution of such services within the Demised Premises shall be
supplied and maintained by the Sublessee at the Sublessee's expense.
a. ELECTRICAL: The Sublessee shall make known to the Sublessor its
electricity requirements at or prior to the execution of this
Sublease. In the event the Sublessee requires additional capacity
beyond that as set forth on Exhibit "C", any additional risers,
feeders, meters, wiring or other equipment required thereby shall be
installed by the Sublessor or a qualified contractor upon the
Sublessee's request and at the Sublessee's cost and expense,
provided, however, that in the Sublessor's sole judgment, the same
are reasonably necessary and will not cause permanent damage or
injury to the Demised Premises or cause or create a dangerous or
hazardous condition or entail excessive alterations, repairs or
expense or unreasonably or materially interfere with or disturb
other lessees. If, at the time of the commencement of this
Sublease, the Demised Premises shall be unmetered for electricity
consumption, the Sublessor shall cause such metering device or
devices to be installed as the Sublessor shall deem necessary and
the cost of such device, together with the expense of installing the
same, shall not be paid by the Sublessee. If such electrical
service is directly with the Niagara Mohawk Power Corporation,
Sublessee shall request service in its own name prior to entering
upon the Demised Premises and pay such costs directly to Niagara
Mohawk Power Corporation.
b. WATER: The Sublessor shall install, or cause to be installed, at no
cost to Sublessee, a water meter and thereby measure the Sublessee's
water consumption. Throughout the duration of the Sublessee's
occupancy, the Sublessee shall keep such meter and installation
equipment in good working order and repair at its own expense. In
the event of activation of the unmetered sprinkler system due to
fire or acts of Sublessee, Sublessor shall render a bill for water
consumption based on output per sprinkler head times the duration of
sprinkler flow. The cost of water is to be the then current charge
by the municipality. Sublessee is to make payment directly to the
utility company supplying such water. Sublessor warrants that a
water line of at least 2" or greater delivering at a constant flow
of 60 to 80 PSI services the Demised Premises.
c. SEWER: Sublessee is to make payment, upon presentation of a bill by
Sublessor, for the then current sewage charge by the municipality
for the Demised Premises, and the amount thereof shall be deemed
Additional Rent hereunder. Lessor warrants that a sewer line of at
least 6" or greater services the Demised Premises.
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d. FUEL OIL AND/OR NATURAL GAS AND/OR LP GAS: Sublessee is to contract
for and pay all costs of liquid or gas fuels directly to supplier,
provided service to the Demised Premises shall not be the obligation
and expense of the Sublessee. Sublessor warrants that a gas line of
at least 2" or greater delivering at a constant flow of 5 PSI to the
Demised Premises.
e. SPRINKLERS: Sprinklers and sprinkler systems now existing in said
Demised Premises shall be maintained and serviced by the Sublessor,
provided, however, that if any such system or any of its appliances
shall be damaged or injured or rendered otherwise than in proper
working order by reason of any act or omission of the Sublessee, the
Sublessee's agents, servants, employees, licensees or visitors, the
Sublessee shall forthwith restore such equipment to good working
condition and order at its own expense. If by reason of the acts or
operations of the Sublessee, the New York Board of Fire Underwriters
or the New York Fire Insurance Exchange or any bureau, department or
official of the state or municipal government requires or recommends
any change in such sprinklers or sprinkler system or if any change
is necessary to prevent the imposition of a penalty or charge
against the full allowance for a sprinkler system in the fire
insurance rate as fixed by such exchange or by any fire insurance
company, the Sublessee shall at its own expense promptly make such
change; provided said change is a direct consequence of Sublessee's
particular use of the Demised Premises. In the event said change is
incident to the general usage of the Demised Premises as warehouse,
industrial or distribution uses, Sublessee shall not be obligated to
perform same at its expense. Any changes whatsoever in the
sprinkler system desired by the Sublessee must be submitted to the
Sublessor for the review and approval of the Sublessor's insurer.
In the event the Sublessee shall fail to pay any tax, rent, levy or charge
for any utility service, which by reason of such non-payment may become a
lien upon any part of the premises of the Sublessor, the Sublessor may,
upon ten (10) days' written notice thereof to the Sublessee, make payment
of such tax, rent, levy or charge together with any interest, penalties or
other accruals due thereon, and upon such payment the amount thereof shall
immediately become due and payable by the Sublessee to the Sublessor as
rent hereunder.
The Sublessor may interrupt or suspend the supply of any such service to
the Demised Premises in order to make any necessary repair or alteration
to the Demised Premises or to any other building or other part of the
premises of the Sublessor provided Sublessor notifies Sublessee, in
writing, promptly after receiving notice thereof from any utility or
governmental authority of any scheduled suspension of such service, and,
in the case of a suspension of service necessitated by any activity of
Sublessor or it affiliates, upon not less than ten (10) days' written
notice sent prior to the Sublessee of the date for the commencement of any
necessary repair or alteration. Said notice shall not be applicable in
the event of an emergency involving the endangerment of life or the
preservation of property from imminent destruction. There shall be no
abatement in rent because of any such interruption or suspension provided
that such repairs or alterations shall be made with reasonable diligence
and provided further that any repair or alteration made by Sublessor shall
not unreasonably interfere with the Sublessee's business. The Sublessor
may at any time during the term of this Sublease assign, convey, transfer
or set over to any municipality having jurisdiction or to any public
utility corporation or private water corporation or sewage disposal
corporation any or all of the Sublessor's right, title and interest in and
to such public utility facilities and thereupon require the Sublessee to
make payment for such services to such assignee, municipality, firm or
corporation in accordance with such rates as such assignee may establish.
Upon any such conveyance, assignment or transfer, there shall be no
abatement of rent due and payable hereunder by reason of any interruption
of such service resulting from the act or fault of such assignee,
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provided further that such conveyance, assignment or transfer shall not
unreasonably interfere with the Sublessee's business.
5. ADDITIONAL RENT: In addition to the rental herein provided, the Sublessee
shall pay to the Sublessor as Additional Rent within twenty (20) days,
that proportion of any real property taxes and assessments levied or
assessed against the premises of which the Demised Premises are a unit,
either school tax or town tax, as the total net rental area within the
Demised Premises bears to the total net rental area within the building or
buildings or land area, including the Demised Premises, which are included
in the unit so taxed or assessed. The Sublessee shall also pay to the
Sublessor as Additional Rent, similarly computed, premium rate charges
incurred by the Sublessor with respect to insurance on the Demised
Premises for general liability, fire and extended coverage. Such amounts
shall be paid by the Sublessee to the Sublessor within ten (10) days after
the receipt by the Sublessee of written notice thereof from the Sublessor.
As of the date immediately preceding execution of this Sublease, Sublessor
represents that the Demised Premises are listed on the applicable
assessment rolls as being exempt from all real estate taxes. Sublessor
agrees not to take any action to seek to have the Demised Premises become
subject to real estate taxation. Nonetheless, should the Demised Premises
become subject to any real estate taxes, Sublessee's liability or
obligation for payment shall not exceed $30,315.00 (thirty thousand three
hundred fifteen and 00/100 dollars) (calculated by multiplying $.15 x
40,420 square feet x 5 years) in the aggregate over the Initial Term.
6. SERVICES - ADDITIONAL RENT: The Sublessee shall initially pay to the
Sublessor as Additional Rent, as and when billed by the Sublessor, $.30
per square foot annual cost, paid monthly, for security and common area
maintenance. The $.30 is an estimated amount expected due for the first
year, or part thereof, which is subject to adjustments detailed later in
the Sublease.
Security and Common Area Maintenance: The charges for maintaining
security and common area maintenance, as hereinbefore defined, shall
include, but not be limited to, the costs of replacing, operating,
managing, equipping, cleaning, lighting, repairing, and removing snow from
main roads, ingress and egress thereto and parking areas (but excluding
dock areas), landscaping and gardening, striping, sign, rail track
maintenance and repair, traffic and safety control (including personnel),
security personnel, maintenance and costs of labor, insurance materials
and supplies, and the Sublessor's administrative and overhead costs for
said services, which administrative and overhead costs shall be charged in
the same manner as such costs are charged to other tenants in Rotterdam
Industrial Park. The Sublessee shall pay its proportionate share, as
hereinafter defined, of the total costs of security and common area
maintenance in the manner hereinafter stated.
In computing the charges for security and common area maintenance, as
provided above, the Sublessee's proportionate share, currently 1.1%, shall
be deemed to be the ratio of the total square footage of the floor area of
the Demised Premises, presently 40,420, to the total square footage of the
floor area of the entire industrial park, presently 3,743,204.
Sublessor shall furnish the Sublessee a written estimate of the
Sublessee's proportionate share of the charges specified above for the
first calendar year or portion thereof, or for the next succeeding
calendar year, as the case may be, and said charges shall be paid monthly
with Fixed Minimum Rent, in advance commencing on the first day of the
first Sublease Year. Charges for the first and last Sublease Years shall
be on a pro rata basis based upon twelve (12) thirty (30) day months.
The Sublessee shall at its own expense maintain all portions of the
Demised Premises and immediately adjoining areas in a clean and orderly
condition free of dirt and rubbish, and the Sublessee shall remove or
cause to be removed all
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rubbish from the Demised Premises and immediately adjoining areas at the
Sublessee's expense. Under no conditions will Sublessor permit Sublessee
to use outside areas for parking of unregistered and/or disabled or
nonfunctioning or damaged vehicles except for the temporary storage in the
case of an emergency, or for the accumulation of pallets and/or other
packing materials. Sublessee must install a dumpster or similar trash
receptacle of ample size at inception of occupancy at a location proximate
to the Demised Premises as provided by the Sublessor. In the event the
Sublessee permits accumulations of rubbish, which the Sublessor in the
exercise of its judgment may deem unreasonable or harmful, injurious or
deleterious to the use and enjoyment of the remainder of the premises of
the Sublessor of which the Demised Premises are a part, the Sublessor may
remove such rubbish and charge the cost thereof to the Sublessee and the
Sublessee shall thereupon become liable to the Sublessor for such cost as
Additional Rent. Sublessee shall keep all fire doors clear and shall not
obstruct dock areas with vehicles or goods excepting the normal process of
loading and unloading operations from inside storage to transport
vehicles.
7. USE: The Demised Premises are hereby leased to the Sublessee upon the
express condition that the Sublessee shall use the said Demised Premises
for receiving, ordering, production, shipping and selling of products,
materials and merchandise made or distributed by Sublessee or its
affiliates and for no other purpose without the written consent of the
Sublessor first obtained.
1. Will rail be utilized? Yes X No
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If Yes, what will the average be?
Rail Cars Per Day .5 Month 15 Year 180
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2. Will there be any truck traffic? Yes X No
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If Yes, what will the average be?
Trucks Per Day 25 Month 750 Year 8,900
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3. Number of employees in your local operation:
Initial Start Up 50 After One Year 125
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4. Number of employee parking spaces needed:
Initial Start Up 65 After One Year 135
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All uses to which the Demised Premises shall be put by the Sublessee shall
conform to the requirements of any and all local laws, ordinances, rules
or regulations adopted or enacted by the municipality having jurisdiction
over the Demised Premises and shall also conform to any special use permit
or certificate of occupancy or other permit of any kind issued or required
to be issued by any governmental authority having such jurisdiction over
the Demised Premises and shall not be put to any such use by the Sublessee
until all governmental rules and regulations relative to or affecting such
use have been complied with and all governmental permits required as a
condition precedent to such use shall have been obtained. The Sublessee
shall conduct its business throughout the term hereof in a first-class
manner and shall not use the Demised Premises for or carry on or permit
upon said Demised Premises any offensive, unreasonably noisy, or dangerous
business, trade, manufacture or occupation or any nuisance or any activity
contrary to public policy or any activity causing a noxious or offensive
odor or causing pollution to the atmosphere, nor permit any auction sale
to be held or conducted upon said Demised Premises, nor shall it use or
permit the use of such Demised Premises or part thereof for any immoral or
any other purpose prohibited by law or which will increase the rate of
insurance upon the building in which said Demised Premises may be located
or cause a cancellation of any insurance policy covering said building or
any part thereof. The Sublessee shall not do or suffer anything to be
done upon said Demised Premises which will cause structural injury to
said Demised Premises or to the building of which the same form a part,
nor shall it cause said Demised Premises to be overloaded, nor shall it
permit any
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machinery, apparatus or other appliance to be used or operated upon said
Demised Premises which will injure said Demised Premises or the building
of which the same form a part, nor shall the Sublessee permit any
noisemaking device to be operated or allowed upon said Demised Premises
for the purpose of attracting trade or otherwise. The Sublessee shall not
permit any use to be made of the Demised Premises which will in any way
impair the efficient operation of the sprinkler within the building
containing the Demised Premises. In addition to the Sublessee's liability
for Additional Rent in respect of insurance premium rate increases as
provided in Paragraph 5 hereof, if any act on the part of the Sublessee or
use of the Demised Premises by the Sublessee shall cause directly or
indirectly any increase of the Sublessors insurance expense, such
additional expense shall be paid by the Sublessee to the Sublessor upon
demand as Additional Rent. No such payment by the Sublessee shall limit
the Sublessor in the exercise of any other rights or remedies or
constitute a waiver of the Sublessor's right to require the Sublessee to
discontinue such act or use.
8. REPAIRS AND MAINTENANCE: Throughout the term of this Sublease the
Sublessee shall take good care of the Demised Premises. Sublessor is
responsible for maintenance of the structural elements, fire alarm system,
and sprinklers, and Sublessee for the maintenance and repairs of all other
non-structural elements and systems, including doors and windows. When
used in this paragraph the term "repairs" shall include all necessary
replacements, renewals, alterations, additions and betterments of a
non-structural character. All repairs made by the Sublessee shall be at
least equal in quality and class to the original work. The Sublessee
shall make no structural alterations to the Demised Premises without prior
permission of the Sublessor given in writing. Upon the expiration of the
term of this Sublease or sooner termination, the Sublessee shall surrender
the Demised Premises to the Sublessor in the same condition as received,
ordinary wear and tear and damage by fire, earthquake, act of God or the
elements alone excepted. Sublessor, acting in its reasonable judgment,
may make demand that maintenance be accomplished if a hazardous or
deteriorating condition exists. If Sublessee desires services by
Sublessor's maintenance personnel such will be performed on a work order
basis only.
9. ALTERATIONS AND LIENS: The Sublessee shall make no structural alterations
or additions to the Demised Premises without prior written consent of the
Sublessor. Upon the giving of such written consent all alterations,
additions and improvements, excluding trade fixtures, furnishings and
equipment made in, to or on the Demised Premises shall become the property
of the Sublessor (or Master Lessor, as hereinafter defined) and shall
remain upon and be surrendered with the Demised Premises, except that the
Sublessee shall ascertain from the Sublessor within sixty (60) days before
the expiration of this term whether the Sublessor desires to have the
Demised Premises or any part or parts thereof restored to their condition
as of the time of the delivery thereof to the Sublessee (except for any
and all offices or office-related improvements which shall remain), and,
if the Sublessor so desires, the Sublessee shall restore said Demised
Premises or such part or parts thereof to such original condition before
the end of the term of this Sublease entirely at the Sublessee's own cost
and expense. The Sublessee shall indemnify and save and hold harmless the
Sublessor from all liens, claims or demands arising out of any work
performed, materials furnished or obligations incurred by or for the
Sublessee upon said Demised Premises during said term and agrees not to
suffer any such lien or encumbrance to be imposed on any of the
Sublessor's premises. The Sublessor shall have the right, after the
giving of not less than five (5) days' notice to the Sublessee to remove
such lien or encumbrance, to bring such action or proceeding as may be
necessary to effect the removal thereof and the costs and expenses
thereof, including reasonable attorney's fees, shall become immediately
due and payable by the Sublessee to the Sublessor as Additional Rent.
10. ENTRY AND INSPECTION: The Sublessor and its agents may enter upon the
Demised Premises at all reasonable times to inspect the same, to submit
them to
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a prospective purchaser or to make any repairs which the Sublessor shall
consider necessary for the protection, improvement or preservation of the
building in which the Demised Premises are situated, or to make any
changes in the plumbing, wiring, meters or other equipment, fixtures or
appurtenances of the building, provided that the same may be performed
without material interference with the business operations of the
Sublessee, and there shall be no liability against the Sublessor in favor
of the Sublessee for damages sustained by the Sublessee by reason of such
repairs or changes nor shall the Sublessee be entitled to any abatement of
rental by reason thereof. At any time after sixty (60) days prior to the
termination of the Sublease the Sublessor may place on said Demised
Premises any usual or ordinary "To Let" or "To Lease" signs. For the
purposes of this paragraph, the Sublessor may hold at all times a
duplicate set of keys to the Demised Premises. The Sublessee shall make
no changes in locks or other facilities controlling access to the Demised
Premises without the permission of the Sublessor and whenever such
permission is granted, the Sublessee shall provide the Sublessor with a
duplicate set of keys so as to provide the Sublessor with access at all
times.
11. SUBLETTING AND ASSIGNMENT: The Sublessee shall not, without the
Sublessor's prior written consent, which consent shall not be arbitrarily
withheld or unreasonably delayed, assign or sublet this Sublease or permit
any person or entity other than the Sublessee to use or occupy, or store
goods, materials or other property (such goods, materials and property
being hereinafter referred to as "Property") at the Demised Premises or
any part thereof.
Notwithstanding the foregoing, or anything to be contrary elsewhere
contained in this Sublease, Sublessee, without Sublessors consent, but
upon not less than thirty (30) days' prior written notice, may assign this
Sublease or sub-sublet the Demised Premises, or any portion thereof, to
its parent, any of its subsidiaries or to any other entity affiliated with
Sublessee or its parent, or to a corporation or other entity resulting
from any reorganization or merger to which Sublessee, its parent or any of
its subsidiaries or affiliates is a party, provided Sublessee shall remain
obligated under this Sublease (the foregoing being heroinafter referred to
as a "Permitted Assignment"). The Sublessor will not divulge to any third
parties, except if required by the applicable loan document, to Sublessors
lender, any confidential information received with respect to any proposed
reorganization or merger.
Any (a) assignment or subletting or (b) or the permitting of any person or
entity other than the Sublessee to use, or occupy any portion of, or store
any Property at the Demised Premises, without the consent of the Sublessor
in each instance, shall be void and shall constitute a breach of this
Sublease. In the event of such prohibited assignment, sublet or use,
occupancy or storage, the Sublessor may avail itself of any other remedies
contained in this Sublease and any other remedy available to it under
applicable law. In addition to the foregoing, in the event of any breach
of clause (b) in the preceding sentence, the Sublessor may cause the
removal of such occupant and/or materials, goods or Property, at the sole
cost and expense of the Sublessee.
If the Sublessee proposes to assign the Sublease, enter into any sublease
of the Demised Premises or grant to any person or entity the right to use,
occupy, or store Property at any portion of the Demised Premises, the
Sublessee shall deliver written notice thereof to the Sublessor, together
with a copy of the proposed assignment, sublease or other agreement, if
any, governing such use, occupancy or storage, and such financial
information (i.e., balance sheet and annual reports concerning such
sublessee, assignee or the person or entity that Sublessee proposes to let
use or occupy, or store any Property at the Demised Premises (any such
person or entity being hereinafter referred to as a "Licensee") as is
acceptable to the Sublessor, in the exercise of Sublessor's reasonable
discretion, the foregoing notice and financial information shall be
delivered at least thirty (30) days prior to the effective date of the
proposed assignment, the commencement date of the term
-7-
of the proposed sublease or the date on which any person or entity
proposes to use, occupy or store Property at the Demised Premises or any
pad thereof. Any proposed assignment, sublease or use, occupancy or
storage of Property shall be expressly subject to the terms, conditions,
and covenants of this Sublease. The Sublessee shall reimburse the
Sublessor for all reasonable legal costs involved in reviewing a proposed
assignment, subletting or agreement with any Licensee for the use,
occupancy or storage of any Property.
Any proposed assignment shall contain a written assumption by the assignee
of all of the Sublessee's obligations under this Sublease. Any sublease
shall (a) provide that the sub-sublessee shall procure and maintain a
policy of insurance as required of the Sublessee under this Sublease; (b)
provide for a copy to the Sublessor of any notice of default by either
party; and (c) otherwise be reasonably acceptable in form to the
Sublessor.
No consent by the Sublessor to any subletting, assignment or use,
occupancy or storage of Property by any Licensee shall be deemed to be a
consent to any further subletting (or sub-subletting), assignment or any
other use, occupancy or storage by any Licensee (including the Licensees
for whom permission is being given).
In the event that the Sublessee assigns or subleases any portion of the
Demised Premises or permits the use, occupancy or storage of Property at
any portion of the Demised Premises to anyone other than the Sublessee, or
a subsidiary or affiliate of Sublessee pursuant to a Permitted Assignment,
the Sublessee shall pay to the Sublessor monthly, as Additional Rent
hereunder, one hundred (100%) percent of the amount calculated by
subtracting from the rent and other charges and considerations payable
from time to time by the assignee, sub-sublessee or Licensee to the
Sublessee for aforesaid space, the amount of rent and other charges
payable by the Sublessee to the Sublessor under this Sublease, allocated
to the assigned, subleased or otherwise utilized portion of the Demised
Premises.
A) Except for a Permitted Assignment, Sublessee shall not have the right
to sublet or assign the Demised Premises except on the following terms and
conditions:
1) Such subletting or assignment shall not relieve the Sublessee
from its duty to perform fully all of the agreements, covenants and
conditions set forth in this Sublease or any Guarantor from the
obligations of any Guaranty executed and delivered in connection
with this leasing.
2) The Sublessee shall first obtain the Sublessor's written consent
to the subletting or assignment in each instance.
3) The Sublessee shall provide the name of the proposed
sub-sublessee or assignee, the terms and conditions of the proposed
subletting or assignment, the nature and character of the business
of the proposed sub-sublessee or assignee, and the banking,
financial and other credit information relating to the proposed
assignee or sub-sublessee reasonably sufficient to enable Sublessor
to determine the financial responsibility of said proposed
sub-sublessee or assignee.
4) Upon the receipt of such request from Sublessee, Sublessor shall
have an option, to be exercised in writing within thirty (30) days
thereafter, to terminate this Sublease effective on a date (the
"Termination Date") set forth in Sublessor's notice of termination,
which shall not be less than thirty (30) days nor more than ninety
(90) days following the service upon Sublessee of Sublessor's notice
of termination.
5) In the event Sublessor shall exercise such option to terminate
this Sublease, this Sublease shall expire on the Termination Date as
if that date had been originally fixed as the expiration date of the
term herein granted
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and Sublessee shall surrender possession of the entire Demised
Premises on the Termination Date in accordance with the provisions
of this Sublease.
B) If Sublessor shall not exercise its option within the period aforesaid,
then Sublessor's consent to such request shall not be unreasonably
withheld but will be given only on the following conditions acknowledged
by Sublessee to be reasonable and proper:
1) That the subletting or assignment is for the entire Demised
Premises only;
2) That the subletting or assignment shall be to a sub-sublessee
whose occupancy will be in keeping with the dignity and character of
the then use and occupancy of the premises by other lessees and
whose occupancy will not be more objectionable or more hazardous
than that of Sublessee herein. In no event shall any subletting or
assignment be permitted to a school of any kind or an employment or
placement agency; or governmental or quasi-governmental agency;
3) That the subletting or assignment shall not be to any Sublessee,
sub-sublessee or assign of any leased space in the premises of which
the Demised Premises form a part;
4) That no subletting or assignment shall be permitted to any person
or entity who is then a tenant or occupant of Rotterdam Industrial
Park, Northeastern Industrial Park or Scotia-Glenville Industrial
Park;
5) That the sublease or assignment will expressly prohibit
assignment of the Sublease agreement or further subletting by the
sub-sublessee without Sublessor's written consent.
6) If this Sublease shall be assigned, or if the Demised Premises or
any part thereof, be sublet or occupied by any person or persons
other than Sublessee, Sublessor may, after default by Sublessee,
collect rent from the assignee, subtenant or occupant, and apply the
net amount collected to the rent herein reserved, but no such
assignment, subletting, occupancy or collection of rent shall be
deemed a waiver of the covenants contained in this Sublease, nor
shall it be deemed acceptance of the assignee, subtenant or occupant
as a tenant or a release of Sublessee from the full performance by
Sublessee of all of the terms, conditions and covenants of this
Sublease.
12. LIABILITY AND INSURANCE: The Sublessee shall keep, save and hold the
Sublessor harmless and free from all liability, penalties, losses,
damages, costs, expenses, causes of action, claims and/or judgments
arising by reason of any injury or damage to any person or persons or
property including, without limitation, the Sublessee, its servants,
agents and employees, from any cause or causes whatsoever, except for
intentional acts or gross negligence of Sublessor, including leakage,
while in, upon or in any way connected with said Demised Premises or its
appurtenances.
The Sublessor shall not be liable for any loss or damage occasioned by
defective wiring, plumbing, gas, sprinkler, steam, sewer, water or other
pipes or fixtures; the bursting, leaking, running or. clogging of the
above pipes or fixtures or of any heating or air conditioning equipment,
cistern, tank, sprinkler system, boiler, wash stand, closet or wastepipe;
accidental discharge of the sprinkler; water, snow, ice or other foreign
matter being upon or coming through the roof, skylights, trapdoors, doors,
windows or otherwise, unless in each case the foregoing result from the
gross negligence or intentional acts of Sublessor; acts or negligence or
failure to comply with lease covenants by other tenants of the Sublessor;
acts of negligence of guests, invitees and employees of the Sublessee or
other occupants of the
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Demised Premises; acts of negligence of any owners or occupants of
adjacent or contiguous properly or their employees; acts of God; acts of
negligence of any persons not in the employ of the Sublessor. In
connection with any defect in or damage to the structural portions of the
Demised Premises or the building-wide systems servicing the same (not
arising from the act or omission of Sublessee or its sub-subtenants, or
their respective employees, agents or invitees), Sublessor agrees to take
commercially reasonable good faith steps to have Sublessor's landlord or
any other appropriate party repair same.
The Sublessee shall take out and keep in force during the term hereof, at
the Sublessee's expense, public liability and other insurance in companies
acceptable to the Sublessor to protect against any liability to the
public, whether to persons or properly, incident to the use of said
Demised Premises or resulting from accident occurring in or about said
Demised Premises or the areas immediately adjacent thereto, which
insurance shall be in an amount not less than $1,000,000.00 to indemnify
against the claim of one person for personal injuries and not less than
$3,000,000.00 to indemnify against the claim of two or more persons for
personal injuries in any one occurrence and in an amount not less than
$1,000,000.00 per occurrence to indemnify against a claim or claims for
property damage. The Sublessee shall cause every insurer to agree by
endorsement upon the policy or policies issued by it, or by independent
instrument furnished to the Sublessor, that such insurer will give the
Sublessor ten (10) days' written notice at the address where rental is
paid before the policies in question shall be altered or canceled.
Certified copies of said policies or certificates of insurance naming the
Sublessor as additional insured shall be furnished at the time of Sublease
inception. Said policies shall be renewed at the end of each policy
period.
The Sublessor and Sublessee hereby release one another and their
respective officers, agents, employees and servants from any and all
claims or demands for damages, loss, expense or injury to the Demised
Premises or to the furnishings and fixtures and equipment or inventory or
other property of either the Sublessor or the Sublessee in, about or upon
the Demised Premises, as the case may be, which may be caused by or result
from perils, events or happenings which are the subject of insurance
carried by the respective parties and in force at the time of any such
loss, provided, however, that such release and waiver shall be effective
only to the extent of the insurance coverage for such loss. This paragraph
does not preclude the respective parties from any and all other remedies
at law which are available and in no way are their respective rights
prejudiced.
13. ABANDONMENT: In the event the Demised Premises become abandoned or
surrendered or in the event the Sublessee be dispossessed or evicted by
process of law, the Sublessor, in addition to all other remedies granted
by this Sublease or available by operation of law, may deem that any
personal property belonging to the Sublessee left on said Demised Premises
is abandoned, and the Sublessor may enter upon said Demised Premises and
remove therefrom any and all equipment, fixtures and merchandise and sell
the same at public or private sale at such price and upon such terms as
the Sublessor may determine without notice to or demand upon the
Sublessee. Out of the proceeds of such sale the Sublessor may reimburse
itself for the expense of such taking, removal and sale and for any
indebtedness of the Sublessee to the Sublessor and the surplus, if any,
shall be accounted for the Sublessee.
14. DEFAULT: In the event the Sublessee (a) fails to pay the rental herein
provided or any part thereof or any other sum required by the Sublessee to
be paid to the Sublessor within ten (10) days of the date when due or in
the manner herein provided; or (b) if the Sublessee abandons said Demised
Premises or violates any of the provisions of this Sublease respecting
assignments or subletting; or (c) makes default in any of the other
covenants or conditions on the Sublessee's part to be performed hereunder
and such default is not cured within thirty (30) days after notice by the
Sublessor to the Sublessee of such default, then such default or
-10-
breach or act shall give the Sublessor the right to re-enter the Demised
Premises and remove all persons and all or any property therefrom either
by summary dispossess proceedings or by any suitable action or proceeding
at law, or by force or otherwise, without being liable to indictment,
prosecution or damages therefor, and repossess and enjoy said Demised
Premises together with all additions, alterations and improvements, and in
such case the Sublessor may either relet the Demised Premises or any parts
thereof as agent of the Sublessee and receive the rents applying the same
first to the payment of such expenses as the Sublessor may have incurred
and then to the fulfillment of the covenants of the Sublessee. The
Sublessor may rent said Demised Premises for a term extending beyond the
term hereby granted without releasing the Sublessee from any liability.
Upon the expiration of this Sublease prior to the expiration of its term
by operation of any provision hereof or by summary proceedings or
otherwise, then, whether or not the Demised Premises be relet, the
Sublessee shall remain liable for and shall pay the Sublessor, until the
time when this Sublease would have expired but for such termination or
expiration, the equivalent of the amount of all of the rent and Additional
Rent reserved herein, less the avails of reletting, if any, and the same
shall be due and payable by the Sublessee to the Sublessor on the several
rent days above specified. The Sublessee hereby expressly waives any and
all rights of redemption in the event of eviction or dispossession by
judgment or warrant of any court or judge, and the Sublessee waives and
will waive all right to trial by jury in any summary proceeding hereafter
instituted by the Sublessor against the Sublessee in respect of the
Demised Premises. All remedies herein provided shall be deemed cumulative
and shall in no way limit or restrict the Sublessor from pursuing such
other and further remedies as may be allowed at law or in equity.
15. [DELETED PRIOR TO EXECUTION]
16. HOLDING OVER: In the event the Sublessee holds over the term hereby
created with the consent of the Sublessor, the Sublessee shall become a
tenant from month to month at the average monthly rental payable hereunder
for the immediately preceding six (6) month period, plus twenty-five (25%)
percent increase at discretion of Sublessor.
17. DESTRUCTION: In the event the Demised Premises are damaged by fire,
earthquake, enemy, act of God or the elements or other casualty, the
Sublessor, unless it shall otherwise elect as hereinafter provided, shall
take commercially reasonable, good faith steps to have the Master Lessor
repair the same with reasonable dispatch after written notice of the
damage. If such damage is so extensive as to render the Demised Premises
untenantable, but the election is made to nevertheless repair same, then
the rent shall be abated to an extent corresponding with the time during
which and the extent to which said Demised Premises may have been
untenantable. If such repairs, however, are delayed because of the
Sublessee's failure to adjust the Sublessee's own insurance claim, no
rental reduction shall be allowed beyond a reasonable time allowed for
such adjustment. If, however, such damage or destruction to said Demised
Premises shall be caused by negligence or intentional, improper conduct on
the part of the Sublessee or the Sublessee's agents, servants, employees,
visitors or licensees, then, notwithstanding such damage or destruction,
the Sublessee shall be liable for the rent during the unexpired portion of
the demised term without abatement unless this Sublease is terminated by
mutual agreement of the parties. The Sublessor shall have the right to
determine, within a reasonable time after such occurrence regardless of
its cause, whether to demolish, rebuild or reconstruct the building
containing the Demised Premises and, in the event of such decision by the
Sublessor to so demolish, rebuild or reconstruct, then, upon notice given
by the Sublessor to the Sublessee, this Sublease shall terminate on a date
to be specified in such notice as if that date had been originally fixed
as the expiration date of the term here demised and the rent shall be
adjusted as of the time of the occurrence of such damage or destruction.
The Sublessee shall give immediate notice to the Sublessor in case of such
damage or destruction. Notwithstanding anything else
-11-
herein to the contrary, in the event the Demised Premises cannot, with
reasonable effort, be repaired with one hundred twenty (120) days,
Sublessee may, upon not less than thirty (30) days' prior written notice
to Sublessor, terminate this Sublease; provided that any such notice must
be given within thirty (30) days after Sublessor advises Sublessee that
the Demised Premises cannot be repaired within one hundred twenty (120)
days.
18. CONDEMNATION: If the whole or a portion of the Demised Premises shall be
taken for any public or quasi-public use by right of eminent domain, with
or without litigation, or transferred by agreement or purchase in
connection with such public or quasi-public use, the Sublease at the
option of the Sublessor shall terminate as of the date title shall vest in
the condemnor. If any part of the Demised Premises shall be so taken as
to render the remainder thereof unusable for the purposes for which the
Demised Premises were leased, then the Sublessee shall have the right to
terminate this Sublease by giving notice as hereinafter provided. Upon
any such taking, with or without a termination of this Sublease, all
compensation awarded shall belong and be paid to the Sublessor and the
Sublessee shall have no claim thereto and the Sublessee hereby irrevocably
assigns, transfers, releases and sets over to the Sublessor any right to
compensation for damages to which the Sublessee may become entitled during
the term hereof by reason of such condemnation or taking, provided,
however, that in the event of such taking and a termination of this
Sublease by either party as a result of or in connection therewith the
Sublessee shall be entitled to a payment from the Sublessor of an amount
equal to the unamortized cost (depreciated on a straight line basis
computed monthly) to the Sublessee of all leasehold improvements made by
the Sublessee during the original term hereof and such payment shall be
made by the Sublessor out of the proceeds received by the Sublessor from
the condemning authority and such claim of the Sublessee shall not be
deemed a claim against the condemning authority or a lien on such
proceeds. In no event shall the amount which the Sublessor shall be
obligated to pay the Sublessee hereunder exceed the amount of the
Sublessor's award less all expenses incurred by the Sublessor in
connection with the securing or obtaining of such award. In the event
that upon such taking there shall be no termination of this Sublease by
either party, this Sublease shall continue for the balance of its term as
to the part of the Demised Premises remaining. In such event the base
rent payable by the Sublessee to the Sublessor hereunder and all items of
Additional Rent payable hereunder as are determinable by reference to the
area of the Demised Premises shall be reduced pro rata in the proportion
in which the area of the Demised Premises so taken bears to the area of
the Demised Premises before such taking, and all other liabilities of the
Sublessee hereunder shall remain unaffected. If upon such taking this
Sublease shall not terminate and shall continue as herein provided, the
Sublessor shall at its own cost and expense restore the remaining portion
of the Demised Premises to the extent necessary to render it useable for
the purposes for which it was leased and shall make all repairs to the
building in which the Demised Premises are located to the extent necessary
to constitute the building a complete architectural unit, provided that
such work shall not exceed the scope of construction existing immediately
prior to such taking and the cost of such restoration shall not exceed the
proceeds of the condemnation award less the Sublessor's expenses in
securing such award. Termination of this Sublease by either party under
the provisions of this paragraph shall be effected by the delivery of a
thirty (30) day notice by such party to the other.
19. SALE OF PREMISES: In the event of a sale or conveyance by the Sublessor
of all or any part of the Sublessor's estate containing the Demised
Premises, the same shall operate to release the Sublessor from any future
liability upon any of the covenants or conditions, express or implied,
herein contained in favor of the Sublessee, and in such event the
Sublessee agrees to look solely to the responsibility of the successor in
interest of the Sublessor.
20. ESTOPPEL: At Sublessor's request, Sublessee agrees, within ten (10) days
after receipt, to execute a lease estoppel certificate stating that:
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a. The Sublease is unmodified and in full force and effect;
b. The term of the Sublease has begun and rent payable under the
Sublease is accruing;
c. No notice of default or termination of the Sublease has been served
on Sublessee under the terms of the Sublease;
d. To the best of Sublessee's knowledge, neither he nor the Sublessor
are in default in any way under the Sublease. In addition,
Sublessee certifies that no event has occurred that with the passage
of time or giving notice would constitute default under the Sublease
by either him or the Sublessor; and
certifying with respect to such other information with respect to this
Sublease and Sublessee's occupancy of the Demised Premises as Sublessor
shall reasonably request.
21. [DELETED PRIOR TO EXECUTION]
22. SIGNS: The Sublessee shall not inscribe, paint or affix any signs,
placards or advertisements on the exterior or roof of the Demised Premises
or upon entrance doors, windows or upon any adjoining or appurtenant lands
without obtaining the prior approval of the Sublessor in writing or
without obtaining such permits therefor as may be required under any
ordinance, local law, order, rules of regulation of the municipality
having jurisdiction thereof. Any such sign, placard or advertisement so
placed upon the Demised Premises shall be removed by the Sublessee at the
termination of this Sublease and the Sublessee shall repair any damage or
injury to the Demised Premises caused thereby, and upon the failure of the
Sublessee to comply herewith, the Sublessor may have the same removed and
the Sublessee shall be liable to the Sublessor for the expense thereof.
23. ENTIRE AGREEMENT, WAIVER: This instrument contains all the agreements and
conditions made between the parties hereto and may not be modified,
changed or terminated in whole or in part orally or in any manner other
than by agreement in writing signed by the parties hereto or their
respective successors in interest. The receipt of rent by the Sublessor,
with knowledge of any breach of this Sublease by the Sublessee or of any
default on the part of the Sublessee in the observance or performance of
any of the conditions or covenants of this Sublease, shall not be deemed
to be a waiver of any provision of this Sublease. If the Sublessee makes
any payment of any amount less than that due hereunder, the Sublessor
without notice may accept the same as a payment on account; the Sublessor
shall not be bound by any notation on any check involving such payment nor
any statement in any accompanying letter. No failure on the part of the
Sublessor to enforce any covenant or provision herein contained, nor any
waiver of any right thereunder by the Sublessor, unless in writing, shall
discharge or invalidate such covenant or provision or affect the right of
the Sublessor to enforce the same in the event of any subsequent breach or
default. The receipt by the Sublessor of any rent or any other sum of
money or any other consideration hereunder paid by the Sublessee after the
termination, in any manner, of the term herein demised, or after the
giving by the Sublessor of any notice hereunder to effect such
termination, shall not reinstate, continue or extend the term herein
demised, or destroy, or in any manner impair the efficacy of any such
notice of termination as may have been given hereunder by the Sublessor to
the Sublessee prior to the receipt of any such sum of money or other
consideration, unless so agreed to in writing and signed by the Sublessor.
Neither acceptance of the keys nor any other act or thing done by the
Sublessor or any agent or employee of the Sublessor during the term herein
demised shall be deemed to be an acceptance of a surrender of said Demised
Premises, excepting only an agreement in writing signed by the Sublessor
accepting or agreeing to accept such a surrender. Any right herein
granted to the Sublessor to terminate this Sublease shall apply to any
extension or renewal of the term herein demised, and the exercise of any
such right during the term herein demised shall terminate any extension or
renewal of the term herein demised, and any right on the part of the
Sublessee thereto. No act or conduct of any nature or
-13-
character on the part of the Sublessor or its agents, servants or
employees other than by an agreement in writing signed by the Sublessor
shall be construed as a waiver of the provisions of this paragraph
irrespective of any circumstances existing at the time of such act or
conduct.
24. NOTICE: Any notice required hereunder or by law to be served upon either
of the parties shall be in writing and it shall be sent by certified mail,
postage prepaid, addressed to the Demised Premises in the instance of the
Sublessee, and to the place where rental is paid in the instance of the
Sublessor, or to such other address as may be from time to time furnished
in writing by either party to the other. Notice in writing shall be
deemed to be communicated twenty-four (24) hours from the time of mailing.
25. [DELETED PRIOR TO EXECUTION]
26. FINANCIALS: From time to time during the term of the Sublease, but not
more often than annually, the Sublessor has the right to request current
financials from the Sublessee.
27. ANCILLARY FACILITIES: Sublessor agrees that Sublessee shall have the
right, under the then prevailing terms, conditions and rates; and subject
to their availability to use the following facilities at, nearby, or
within the Rotterdam Industrial Park:
a) railroad-related transport, loading/unloading and storage
facilities; or
b) cold, frozen and dry goods storage facilities.
28. SECURITY BARRIERS: Sublessor agrees to permit Sublessee to erect, install
or otherwise construct whatever security-related barriers within the
Demised Premises Sublessee deems necessary between the Demised Premises
and any adjacent premises, provided the work is performed in accordance
with all applicable governmental laws and regulations. Sublessee shall not
be obligated to remove these security barriers upon surrender of the
Demised Premises to Sublessor. Further, any work performed hereunder
shall be subject to the provisions of Paragraph 9 of this Sublease as it
refers to liens.
29. MASTER LEASE: Sublessor and Sublessee acknowledge that this Sublease is
subject to all terms and conditions of that certain lease dated April 23,
1996 ("Master Lease") between The People of the State of New York acting
by and through the Commission of the State of New York ("Master Lessor')
and Sublessor. Notwithstanding the aforementioned, Sublessor warrants
that any and all terms, conditions and representations made in this
Sublease are not contrary to or in conflict with any terms, conditions and
covenants of the Master Lease. This Sublease is contingent upon Sublessor
obtaining the consent of the Master Lessor to this Sublease within ninety
(90) days of its final execution.
30. NOTICE OF SUBLEASE EXTENSION: In the event Sublessor shall obtain the
right to lease the Demised Premises from Maser Lessor for a period beyond
the expiration date of Sublessee's Renewal Term, as hereinafter described,
then Sublessor shall promptly notify Sublessee or such fact.
31. ENVIRONMENTAL MATTERS: Sublessor represents and warrants that to its
knowledge no leak, spill, discharge, emission or disposal or hazardous or
toxic substances has occurred on the Demised Premises and that to
Sublessor's knowledge, the soil, ground water, soil vapor on or under the
Demised Premises is free of toxic or hazardous substances as of the date
hereof. Except to the extent caused by Sublessee, Sublessor agrees not to
attempt to hold Sublessee and its officers, employees and agents liable
for any claims, judgements, damages, fines, penalties, costs, liabilities
(including sums paid in settlement of claims) or loss
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including attorneys' fees, consultants' fees, and experts' fees which
arise during or after the term or any renewal term or in connection with
the presence or suspected presence of toxic or hazardous substances in the
soil, ground water, or soil vapor or in, under or upon the Demised
Premises.
In the event Sublessee shall become aware of any environmental problem at
the Demised Premises, which has, or in the exercise of reasonable
discretion on the part of Sublessee could have, a material adverse affect
upon Sublessee's business operations conducted at the Demised Premises,
Sublessee shall have the right, on not less than thirty (30) days' prior
written notice, to cancel this Sublease; provided that Sublessee must send
such notice within thirty (30) days after the earlier to occur of (i) the
date Sublessor advises Sublessee of the existence of such environmental
problem or (ii) the date Sublessee first receives actual knowledge of such
problem.
32. RENEWAL OPTION: If Sublessee shall not be in default of any of the terms,
covenants and conditions of this Sublease at the time of giving the notice
set forth within this Paragraph, as well as at the end of the Initial Term
of this Sublease, the Sublessee is hereby granted the option to renew this
Sublease for one (1) five (5) year period (the "Renewal Term") by giving
notice, in writing, to Sublessor at least ninety (90) days prior to the
expiration of the Initial Term. The rental for the Renewal Term shall be
as outlined on Exhibit A with the Lessee paying its pro rata share of
taxes (but with no limitation as to amount), insurance and security and
common area maintenance (triple net costs) calculated and paid in the same
manner as described herein.
33. CONSUMER PRICE INDEX:
A. Definitions: For the purpose of calculating the cost of living
adjustment referred to on Exhibit A, the following definitions shall
apply: (i) the term "Base Month" shall mean the calendar month
immediately preceding the calendar month in which the term of this
Sublease commences; (ii) the term "Price Index" shall mean the
"Consumer Price Index for All Urban Consumers" published by the
Bureau of Labor Statistics of the United States Department of Labor,
for New York-Northeastern, N J, All Items, (1967=100) or any renamed
local index covering the metropolitan New York area or any other
successor or substitute index appropriately adjusted; (iii) the term
"Price Index for the Base Month" shall mean the Price Index for the
Base Month; and (iv) the term "Equalization Factor" shall mean one
hundred percent (100%).
B. The rent payable during the Renewal Term shall be adjusted to
reflect a cost of living adjustment. The adjustment shall be based
on the percentage difference between the Price Index for the Base
Month and the Price Index for the month immediately preceding the
commencement of the Renewal Term (the "Adjustment Month"). (i) In
the event the Price Index for the Adjustment Month reflects an
increase over the Price Index for the Base Month, then the annual
rental rate to be charged for the Renewal Term shall be multiplied
by the Equalization Factor of the percentage difference between the
Price Index for the Base Month and the Price Index for the
Adjustment Month, and the resulting sum shall be added to such
annual rental rate, effective as of commencement of the Renewal
Term. Sublessee covenants and agrees that said adjusted annual
rental rate shall thereafter be payable hereunder in equal monthly
installments.
The following illustrates the intentions of the parties hereto as to
the computation of the aforementioned cost of living adjustment in
the rental rate payable hereunder during the Renewal Term:
-15-
Assuming that the fixed annual rent is $10,000, that the
Equalization Factor is 100%, that the Price Index for the Base Month
was 102.0 and that the Price Index for the Adjustment Month was
105.0, then 100% of the percentage increase thus reflected, i.e.,
100% x 2.941%, or 2.94%, would be multiplied by $10,000, and the
annual rental rate would be increased $294.00 (plus any other
adjustments computed in accordance with the terms of this Sublease)
effective as of the first day of the Renewal Term.
In the event that any cost of living adjustment is not available as
of the Adjustment Month, the monthly rent payments shall be made on
the basis of the next preceding monthly rental until the cost of
living adjustment is available when the monthly rental payment next
due shall be computed on the basis of the cost of living adjustment
increased to retroactively adjust the rental paid during the period
at the old rate, and all subsequent monthly payments in such period
shall be at the new rate.
C. No adjustments or recomputations, retroactive or otherwise, shall be
made due to any revision with may later be made in the first
published figure of the Price Index for any month.
D. Any delay or failure of Sublessor in computing or billing for the
rent adjustments hereinabove provided, shall not constitute a waiver
of or in any way impair the continuing obligation of Sublessee to
pay such rent adjustments hereunder.
E. Notwithstanding any expiration or termination of this Sublease prior
to the date that this Sublease is scheduled to expire (except in
case of a cancellation by mutual written agreement) Sublessee's
obligation to pay rent as adjusted under this Paragraph shall
continue and shall cover all periods during the Renewal Term up to
the date that this Sublease is scheduled to expire, and shall
survive any default under this Sublease.
34. BROKERAGE: Sublessee warrants and represents that it has not dealt with
any real estate broker or agent in connection with this Sublease or its
negotiations except Richard Sleasman of Robert Cohn Associates, Inc.
Sublessee shall indemnify and hold Sublessor harmless from any cost,
expense or liability (including cost of suit and reasonable attorney's
fees) for any compensation, commission or fees claimed by any other real
estate broker or agent in connection with this Sublease or its negotiation
by reason of any act of Sublessee. Sublessor agrees to pay a real estate
commission pursuant to the Real Estate Brokerage Commission Agreement
dated on or about the date of this Sublease, by and between Sublessor and
Robert Cohn Associates, Inc.
35. ELECTRICITY RATES: Sublessee shall file by no later than September 1,
1996, the New Load Forms required by Niagara Mohawk Power Corporation to
receive competitive pricing for electricity under the Service
Clarification No. 11 ("SC11 "), which is a tariff agreement to respond to
customer needs and the increasing competitive forces in the energy service
markets. Sublessee agrees to work diligently with Niagara Mohawk Power
Corporation to receive an SC11 rate. The parties agree that should
Sublessee not receive a satisfactory negotiated rate by no later than
October 15, 1996, Sublessee may, at its option, give ten (10) days prior
written notice to terminate this Lease.
36. SUBLESSEE'S FIT-UP: Sublessor, at its soles cost and expense shall
perform the refurbishing requirements as outlined as Sublessor's
responsibility on Exhibit B attached hereto prior to the Term Commencement
Date.
37. GUARANTY: This Sublease is entitled to the benefits of a certain Guaranty
of Sublease dated on or about the date hereof executed by Papa John's USA,
Inc.
-16-
This Agreement shall be interpreted according to the laws of the State of
New York.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
the day and year first above written.
AS TO SUBLESSOR: DISTRIBUTION UNLIMITED, INC.
ATTEST:
/s/ Asa U. Kavanaugh BY: /s/ David M. Buicko
- ------------------------------ ---------------------------------
David M. Buicko
Executive Vice President
DATE: September 4, 1996
-------------------------------
AS TO SUBLESSEE: P.J. FOOD SERVICE, INC.
ATTEST:
BY: /s/ Robert J. Wadell
- ------------------------------ ---------------------------------
NAME:
TITLE: President
DATE: August 29, 1996
-------------------------------
-17-
RENTAL AND TERM SCHEDULE
40,420 Square Feet in Building 14, Bay 4 in Rotterdam Industrial Park
Sublessor: P.J. Food Service, Inc.
11460 Bluegrass Parkway
Louisville, KY 40299
Contact: Robert Wadell (502-266-5200)
Initial Term: Five (5) years
Renewal Term: One (1) five (5) year term under the same terms and conditions
subject only to an adjustment in the rental rate based on the
change in the Consumer Price Index (as described in Paragraph
33 herein) as of the commencement date of the Sublease, but in
no event shall the increase in the Sublease rate exceed
fifteen percent (15%) of the Sublease rate for the initial
term. Said adjusted rental rate shall remain constant
throughout the Renewal Term.
Term Dates: Initial Term: January 31, 1997 through December
31, 2001
Renewal Term: January 1, 2002 through December 31, 2006
Sublease Rates: Initial Term: $2.75 per square foot per annum,
triple net
Renewal Term: $2.75 per square foot per annum, increased
one-time by any increase in the Consumer
Price Index since the Lease Commencement
Date, triple net
Triple net costs at Building 14, Rotterdam Industrial Park are currently $.48
per square foot per annum, of which $.15 per square foot per annum is allocable
to taxes, to the extent charged. Taxes are limited, as described in Paragraph 5
of this Lease, during the Initial Term of the Lease.
Prepared August 28, 1996
EXHIBIT A - RENTAL AND TERM SCHEDULE
REFURBISHING REQUIREMENTS FOR
P.J. FOOD SERVICE, INC.
Services and charges to be addressed by both parties.
Item Responsible Party Description
1. Pedestrian Door Sublessee one (1) - south side
2. Overhead Doors Sublessor two (2)
3. Exterior of Bldg.
4. Interior of Bldg. N/A
5. Office Space Sublessee
6. Toilets Sublessee
7. Heat-Duct Work Sublessee removal of duct work
above office space
Sublessor reposition gas heaters
8. Light Bulbs N/A
9. Electricity N/A
10. Oil N/A
11. Painting Sublessor interior
12. Floors Sublessor fill holes; pressure
wash soil stains
13. Windows N/A
14. Parking Area N/A
15. Other - Ceilings Sublessor replace specific areas
with fiber board and
paint.
- Mechanic Room Sublessor remove compressors;
conduit only
In addition to the items listed above, representatives of Sublessor and
Sublessee agree to met within ten (10) days after the date of the full execution
and delivery of this Sublease to resolve issues relating to building interior
repairs, exterior painting, truck docks, truck canopies and truck apron paving.
Lessor and Lessee agree to work in good faith to resolve these issues
expeditiously, failing which either party may cancel this Sublease prior to the
date Sublessee takes occupancy of the Demised Premises for any purpose.
SUBLESSOR: /s/ David M. Buicko SUBLESSEE: /s/ Robert J. Wadell
----------------------- --------------------------
DATE: September 4, 1996 DATE: August 29, 1996
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EXHIBIT B - REFURBISHING REQUIREMENTS