Exhibit 10.26
SUBLEASE AGREEMENT
for
BUILDING 14, BAY 2
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.................................................... 7
SUBLETTING AND ASSIGNMENT............................................... 7
LIABILITY AND INSURANCE................................................. 9
ABANDONMENT............................................................. 10
DEFAULT................................................................. 10
HOLDING OVER............................................................ 11
DESTRUCTION............................................................. 11
CONDEMNATION............................................................ 12
SALE OF PREMISES........................................................ 13
ESTOPPEL................................................................ 13
SIGNS................................................................... 13
ENTIRE AGREEMENT, WAIVER................................................ 13
NOTICE.................................................................. 14
ANCILLARY FACILITIES.................................................... 14
SECURITY BARRIERS....................................................... 14
MASTER LEASE............................................................ 14
NOTICE OF SUBLEASE EXTENSION............................................ 15
ENVIRONMENTAL MATTERS................................................... 15
RENEWAL OPTION.......................................................... 15
CONSUMER PRICE INDEX.................................................... 15
BROKERAGE............................................................... 16
GUARANTY................................................................ 17
PAINTING................................................................ 17
PRIOR SUBLEASE.......................................................... 17
EXHIBIT A - RENTAL AND TERM SCHEDULE.................................... 18
EXHIBIT B - SITE PLAN .................................................. 19
GUARANTY OF SUBLEASE.................................................... 20
SUBLEASE AGREEMENT
THIS SUBLEASE made as of the 16th day of January, 1997, 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 2, 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 "B"; said Demised Premises being 44,620 square feet, which includes
the 1,400 square foot enclosed loading dock on the north side of Building 14, 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, in common with others, the loading dock
adjacent to Bay 1 servicing the Demised Premises, the 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
"B" 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 as of the date hereof, 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 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 not is made within three (3) days after receipt of telephone notice
that said amount is past due. 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. 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. 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, 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 1.5 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 its
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
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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, 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. Nevertheless, should the Demised Premises
become subject to any real estate taxes, Sublessee's liability or
obligation for payment shall not exceed $33,465.00 (thirty-three thousand
four hundred sixty-five and 00/100 dollars) (calculated by multiplying $.15
x 44,620 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 1.2%, shall
be deemed to be the ratio of the total square footage of the floor area of
the Demised Premises, presently 44,620, 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.
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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 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
--- ---
If Yes, what will the average be?
Rail Cars Per Day .5 Month 15 Year 180
---- ---- ------
2. Will there be any truck traffic? Yes X No
---- ----
If Yes, what will the average be?
Trucks Per Day 25 Month 750 Year 8,900
---- ----- --------
3. Number of employees in your local operation:
Initial Start Up 50 After One Year approx. 125
---- -----
4. Number of employee parking spaces needed:
Initial Start Up 65 After One Year 135
---- -----
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
5
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
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 Sublessor's 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 weer
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. 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
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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 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 Sublessor's consent, but
upon not less then 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 hereinafter referred to
as a "Permitted Assignment"). The Sublessor will not divulge to any third
parties, except if required by the applicable loan document, to Sublessor's
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.
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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 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 part 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 to the,
8
proposed assignee or sub-sublessee reasonably sufficient to enable
Sublessor to determine the financial responsibility of said proposed
sub-sublessee or assignee.
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
9
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 Demised Premises; acts of negligence of any owners or
occupants of adjacent of contiguous property 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 property, 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 five (5) days of receipt of notice that
said amount is past due the date when due or in the manner herein provided;
however, if (5) such notices of
10
delinquency in the aggregate are sent during the term of this Sublease,
then thereafter in the event Sublessee fails to pay the rental provided or
any part thereof or any sum required by Sublessee to be paid to the
Sublessor within ten (10) days of the time herein provided or, if at any
time rent is not paid, 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 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
11
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 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
12
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:
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
13
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 of 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
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. [DELETED PRIOR TO EXECUTION]
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 as of
January 15, 1997 ("Master Lease") between The Dormitory Authority 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.
14
30. NOTICE OF SUBLEASE EXTENSION: In the event Sublessor shall obtain the right
to lease the Demised Premises from Master 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 Promises 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 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, NJ, 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
15
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:
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 August 30, 1996, by
and between Sublessor and Robert Cohn Associates, Inc.
16
35. 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.
36. PAINTING: On or before June 30, 1997 Sublessor shall have the exterior of
the Demised Premises painted. Sublessee shall reimburse Lessor, as
Additional Rent, for a portion of the cost of such painting by paying an
amount equal to one (1) month's base rent. Such amount shall become due and
payable within thirty (30) days after Lessor has notified Lessee, in
writing, of the completion of such painting.
37. PRIOR SUBLEASE: This Sublease supersedes and replaces, in its entirety,
that certain lease dated September 4, 1996 between Sublessor and Sublessee
(the "Prior Sublease"), which Prior Sublease the parties hereto agree is
hereby declared null, void and of no further force or effect.
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:
ATTEST: DISTRIBUTION UNLIMITED, INC.
/s/ Heidi Parkes BY: /s/ David M. Buicko
- ---------------------------- ----------------------------
David M. Buicko
Executive Vice President
DATE: May 29, 1997
--------------------------
AS TO SUBLESSEE: P.J. FOOD SERVICE, INC.
ATTEST:
/s/ James D. Westfall BY: /s/ Robert J. Wadell
- ---------------------------- ----------------------------
NAME: Robert J. Wadell
TITLE: President P.J. Food Service
DATE: May 26, 1997
--------------------------
17
GUARANTY OF SUBLEASE
In order to induce Distribution Unlimited, Inc., a New York corporation, as
Sublessor, to enter into a Sublease (the "Sublease") with P.J. Food Service,
Inc., as Sublessee, the undersigned, Papa John's USA, Inc. (the "Guarantor"),
who owns all of the stock of P.J. Food Service, Inc., hereby guarantees to
Sublessor:
The full and prompt performance and observance by P.J. Food Service, Inc. of its
obligations under the Sublease to remove itself and all personal property from
the Demised Premises and to repair all damage caused by such removal at the
termination of the Sublease, whether because of a default under such Sublease,
the expiration of the stated term thereof or otherwise; without requiring any
notice of nonpayment, nonperformance or nonobservance, or notice or demand
whereby to charge the Guarantor therefor, all of which the Guarantor hereby
expressly waives.
This Guaranty constitutes the unconditional, direct and primary obligation of
the Guarantor, and shall be enforceable regardless of whether any steps shall
have been taken to enforce any rights against Sublessee and regardless of any
other condition or contingency. Guarantor consents that Sublessor may do or omit
from doing any or all of the following and the obligations of the Guarantor
hereunder shall not be terminated or impaired by reason thereof:
(i) the assertion by Sublessor against Sublessee of any of the rights or
remedies reserved by Sublessor pursuant to the Sublease;
(ii) the extension of the time for payment or performance on the part of
Sublessee of any agreement or condition under the Sublease;
(iii) the supplementing, modification or amendment of the Sublease by the
parties thereto;
(iv) any failure, omission or delay on the part of Sublessor to enforce, assert
or exercise any right or remedy conferred on Sublessor under the Sublease; and,
(v) the voluntary or involuntary liquidation, dissolution, marshaling of
assets and liabilities, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, or any similar proceeding affecting Guarantor or Sublessee
or any of their assets.
Guarantor hereby waives notice of acceptance of this Guaranty and the right of
trial by jury and the right to interpose a counterclaim in any litigation
arising out of or in connection with this Guaranty.
Guarantor represents and warrants that it is fully authorized to enter into this
Guaranty and that Guarantor has a financial interest in P.J. Food Service, Inc.
This Guaranty shall bind the legal successors and assigns of the Guarantor and
shall inure to the benefit of the Sublessor, its successor and assigns and shall
be construed for all purposes in accordance with the laws of the State of New
York.
ATTEST: PAPA JOHN'S USA, INC.
/s/ James D. Westfall By: /s/ Richard J. Emmett
- ------------------------ -------------------------
Name: Richard J. Emmett
Title: Vice President
Date: May 27, 1997
-----------------------
18
RENTAL AND TERM SCHEDULE
44,620 Square Feet in Building 14, Bay 2 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
32 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 February 12, 1997
EXHIBIT A - RENTAL AND TERM SCHEDULE