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STANDARD FORM INDUSTRIAL LEASE

Industrial Lease Agreement

STANDARD FORM INDUSTRIAL LEASE | Document Parties: SWANK, INC. You are currently viewing:
This Industrial Lease Agreement involves

SWANK, INC.

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Title: STANDARD FORM INDUSTRIAL LEASE
Date: 4/2/2007
Industry: Jewelry and Silverware     Sector: Consumer Cyclical

STANDARD FORM INDUSTRIAL LEASE, Parties: swank  inc.
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Exhibit 10.17

STANDARD FORM INDUSTRIAL LEASE

        1 & 2. PARTIES AND PREMISES. Sally A. Starr and Carol T. Donovan as Trustees of Omnibus Realty Trust for the Benefit of Dighton Associates Limited Partnership, with a principal place of business at 39 Brighton Avenue, Boston, Massachusetts 02134, hereinafter called the LESSOR, which expression shall include its heirs, successors, and assigns where the context so admits, does hereby lease to Swank, Inc., a Massachusetts corporation with a principal place of business at 6 Hazel Street, P.O. Box 839, Attleboro, Massachusetts 02703, hereinafter called the LESSEE, which expression shall include its successors, executors, administrators, and assigns where the context so admits, and the LESSEE hereby leases the following described Premises:

        The land and building thereon which building (“Building”) shall consist of approximately 242.000 square feet of rentable first (1st) floor space on the property known as and commonly referred to as 656 Joseph Warner Boulevard, Taunton, Massachusetts, 02764, as more particularly described in Exhibit A attached hereto, the boundary of the Land being clearly delineated in green (‘premises”) together with the right to use in common, with others entitled thereto, the walkways and driveways necessary for access to said Premises. Lessee acknowledges that a non-exclusive easement exists on the Premises for vehicular and pedestrian passage which easement is cross-hatched for identification on Exhibit A. Lessee acknowledges that Lessee shall not act in anyway so as to impact or encroach on the easement or to adversely interfere with the use of the easement.

    3A.        TERM. The term of this lease (“Original Term”) shall be for Five (5) years commencing on March 1, 1991 (“Commencement Date”) and ending on February 29, 1996 (“Expiration Date”). If this Lease is extended or renewed, all references to “term” herein shall refer to the extension or renewal ten unless specifically designated otherwise.

    3B.(1)        EXTENSION OPTION I. Lessee shall have the option, to be exercised as hereinafter provided, to extend the term of this Lease for a period of five (5) years following the expiration of the Original Ten, (hereinafter referred as “Extension Term I”), upon the condition that there is then no existing default (after the expiration of any applicable notice and cure periods) in the performance of any conditions of this Lease by Lessee. Lessee’s extension option shall be exercised by written notice to Lessor, said written notice to be given by Lessee no later than nine (9) months before the expiration of the Original Term. The time periods herein set forth are of the essence, and the requirements for the exercise of this extension option shall be strictly construed. Extension Term I shall be upon the same terms and conditions as provided in the Lease, except for this option and except for Base Rent which shall be payable as follows:

 

 

 

Option I

 

Base Rent—Annually

 

Monthly

 


 

 


 

 


 

 

 

 

 

 

 

 

Lease Years 6-10

 

$ 798,600.00

 

$ 66,500.00

 


    3B(2)        EXTENSION OPTION II. Lessee shall have the option to extend the term to be exercised in the same manner and upon the same conditions as provided in Extension Option I (“Extension Term II”) exercisable nine (9) months prior to expiration of Extension Term I. Extension Term II shall be upon the same terms and conditions as provided in the Lease, except for this option and except for Base Rent which shall be determined as provided herein. Lessee shall pay Base Rent during Extension Option II for lease years 11 through 15 in an amount determined by the Base Rent payable in year 10 increased by loot percent of the percentage that the Consumer Price Index published for the February, 2001 has increased from the Consumer Price Index published for February, 1996. The Consumer Price Index referred to above is the urban wage earners and clerical workers, U.S. city Average, all items (1982-84 equals 100) published by the Bureau of Labor Statistics of the U.S. Department of Labor. If the compilation and/or publication of such Index shall be transferred to any other governmental department or bureau or agency or shall be discontinued, the LESSOR and LESSEE shall by agreement fix an alternative index or method to compute such rent adjustment, but if they cannot agree, the matter shall be settled by arbitration in accordance with the rules of the American Arbitration Association, Provided, however, in no event shall the Base Rent be less than the Base Rent for the last year of the Extension Option I.

    4.        RENT. Effective March 1, 1991, and through the Original Term the LESSEE shall pay to the LESSOR a base rent (“Base Rent”) at the rate of Five Hundred Sixty Eight Thousand Seven Hundred ($568,700.00) Dollars per year, payable in advance in monthly installments of Forty Seven Thousand Three Hundred Ninety One Dollars and Sixty Seven Cents ($47,391.67) Dollars. Where hereinafter mentioned, the Base Rent for the Original Term shall be Five Hundred Sixty Eight Thousand Seven Hundred Dollars.

        Any payment of rent or any other monetary sum due hereunder from LESSEE to LESSOR which is more than ten (10) days late shall bear interest at the rate of one (1%) percent per month (“Interest Rate”).

    5.        SECURITY DEPOSIT. INTENTIONALLY DELETED.

    6.A.        TAXES. LESSEE will pay to LESSOR as additional rent hereunder, when and as designated by notice in writing by LESSOR, one hundred percent (100%) percent of the real estate taxes and assessments attributable to the building or buildings now or hereafter located on the parcel known as 656 Joseph Warner Boulevard and 100% of the real estate taxes and assessments attributable to all parcels of land (now owned or hereafter acquired) that comprise total site of 656 Joseph Warner Boulevard, Taunton, MA 02764 . (“Lessee Tax Obligation”) TENANT PAYS ONE HUNDRED PERCENT (100%) OF THE TOTAL TAX BILL FOR 656 JOSEPH WARNER BOULEVARD, TAUNTON, MA 02764.

        NOTWITHSTANDING the foregoing, in year one of the Lease only, LESSEE TAX OBLIGATION shall be reduced by $20,000, and in year two of the Lease only, Lessee Tax Obligation shall be reduced by $10,000. For the remainder of the original term and any extension thereof, Lessee Tax Obligation shall be as otherwise provided herein. Lessee may prosecute an action for abatement pursuant to Massachusetts General Laws, Chapter 59, Section 59 and shall be liable for all costs and expenses associated with said action; provided, however, Lessee shall provide notice to Lessor prior thereto and provided, further, that in any fiscal year in

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which Lessee Tax Obligation shall be less than 100%, and Lessee shall prosecute successfully a tax abatement, Lessee shall promptly refund to Lessor upon receipt thereof, all amounts to which Lessor shall be entitled less Lessor’s proportionate share for costs and expenses associated with said action. Lessor agrees to reasonably cooperate with Lessee in undertaking any such action.

    6B.        LESSEE shall pay any business, rent or other taxes that are now or hereafter levied upon Lessee’s use or occupancy of the Premises, the conduct of Lessee’s business at the Premises, or Lessee’s equipment, fixtures or personal property including without limitation personal property taxes, business and occupation taxes and occupational license taxes. In the event that any such taxes are enacted, charged or altered so that any of such taxes are levied against LESSOR or the mode of collection is changed so that LESSOR is responsible for the collection or payment of such taxes, LESSEE shall pay any and all such taxes as additional rent to Lessor upon written demand by LESSOR. In the event LESSOR shall be obligated to pay the taxes herein, LESSEE shall pay Lessee’s share hereunder in the manner prescribed for real estate taxes in Article 6A.

    7.        OPERATING COSTS. INTENTIONALLY DELETED.

    8.        ADJUSTED RENT. INTENTIONALLY DELETED.

    9.        UTILITIES. The LESSEE shall pay, as they become due, all bills for electricity and other utilities (whether they are used for furnishing heat or other purposes) that are furnished to the Building and to the Premises and presently separately metered, and all bills for fuel furnished to a separate tank servicing the Building and the Premises exclusively. Lessee shall provide adequate heat and cooling to the Premises and the Building appropriate to the season and sufficient to protect the Premises and Building from damage. All water and sewer charges assessed against the land and Building if not billed directly to Lessee, shall be paid within ten (10) days of billing of LESSOR and shall be deemed to be Additional Rent owed to LESSOR.

        LESSOR shall have no obligation to provide utilities or equipment other than the utilities and equipment within the Premises as of the Commencement Date of this lease. In the event LESSEE requires additional utilities or equipment, the installation and maintenance thereof shall be LESSEE’S sole obligation, provided that such installation shall be subject to the written consent of the LESSOR which consent shall not be unreasonably withheld or delayed.

    10.        USE OF LEASED PREMISES. The LESSEE shall use the Building and Premises only for the purpose of OFFICE, WAREHOUSE AND MANUFACTURING ASSOCIATED WITH THE SALE AND DISTRIBUTION OF LEATHER AND JEWELRY ITEMS AND MEN’S AND WOMEN’S ACCESSORIES but for no other purpose.

    11.        COMPLIANCE WITH LAWS. The LESSEE acknowledges that no trade or occupation shall be conducted in the Building or on the Premises or use made thereof which will be unlawful, improper, noisy or offensive, or contrary to any law or any municipal by-law or ordinance in force in the city or town in which the Premises are situated, or which tend to degrade the economic status of the Building. LESSOR acknowledges that as of the execution of this Lease the permitted uses are not noisy or offensive.

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    12.        FIRE INSURANCE. The LESSEE shall not permit any use of the Building and the Premises which will make voidable any insurance on the property of which the premises are a part, or on the contents of said property or which shall be contrary to any law or regulation from time to time established by the New England Fire Insurance Rating Association, or any similar body succeeding to its powers. After notice of non-compliance, LESSEE shall reimburse the LESSOR, and all other tenants, all extra insurance premiums caused by the LESSEE’S use of the Premises.

    13.        MAINTENANCE.

    A.        LESSEE’S OBLIGATIONS. The LESSEE agrees to maintain the Building and Premises which shall include the landscaped and paved area of the lot on which the Building is located in the same condition as it is as of the execution of this Lease or as may be put in during the term, damage by fire and other casualty and reasonable wear and tear only excepted, and whenever necessary, to replace plate glass and other glass therein, acknowledging that the Premises are now in good order and the glass whole. The LESSEE shall not permit the Premises to be overloaded, damaged, stripped, or defaced, nor suffer any waste. LESSEE shall obtain written consent of LESSOR before erecting any sign on the Premises. LESSEE shall be responsible for the maintenance, repair and replacement of all electrical, plumbing, heating, air conditioning, ventilation and other mechanical installations on or serving the Building and Premises which obligation shall include the lot on which the Building is located, including all landscaped and paved areas.

        Lessee shall be responsible at Lessee’s sole expense for maintenance of the septic system servicing the Premises, the Building and the lot which shall include maintaining a regular maintenance contract on said system. Lessee shall solely be responsible for repair of the septic system, including repair of component parts and shall be liable for all expenses related to the same not to exceed $2,500.00 per lease year. Lessor shall be liable for all reasonable expenses in excess of $2,500.00, provided however, Lessee shall notify Lessor in advance of the estimated expense for said repair and Lessor shall require said expenses to be competitive. Lessor shall be obligated to replace the current septic system, including replacement of component parts of the system, provided, however, in the event the total current septic system shall require replacement, Lessor agrees to replace the same, provided, further, however, that Lessor shall not be obligated hereunder in the event that replacement is due to the failure of Lessee to properly maintain and repair the system. Lessee shall promptly notify Lessor of any and all circumstances which may give rise to the need for replacement of the septic system. Lessor shall be entitled to undertake efforts to repair the system prior to replacement provided that said action is reasonable and is diligently pursued. In the event Lessor shall engage in replacement of the system or component parts hereunder, Lessee shall contribute an amount not to exceed $2,500.00 per lease year.

    B.        LESSOR’S OBLIGATIONS. The LESSOR agrees to maintain the structure of the Building and the roof in the same condition as it is as of the execution of this lease or as it may be put in during the term of this lease, reasonable wear and tear, damage by fire and other casualty only excepted, unless such maintenance is required because of the conduct of LESSEE or those for whose conduct the LESSEE is legally responsible. Lessee shall promptly notify Lessor of any condition or circumstance which nay give rise to Lessor’s obligations hereunder.

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    C.        TRASH RESPONSIBILITY. Lessee acknowledges and agrees that Lessee shall be solely responsible for the removal and disposal of all trash, garbage, rubbish and/or other like encumbrances from the Premises and shall maintain those areas of, in and around the Building so as not to encumber or obstruct or permit such areas to be encumbered or obstructed by reason of such trash, garbage, rubbish and/or like encumbrances. Lessee further acknowledges and agrees that Lessee shall act so as to reasonably dispose of such encumbrances. Lessor shall be entitled to require Lessee to engage in or provide for such additional removal as in Lessor’s judgment shall be reasonably necessary and competitive. In the event that any fines, fees or levies shall be assessed against the Lessor by reason of a violation hereof, such fines, fees or levies shall be the responsibility of Lessee and shall be payable by Lessee as additional rent of demand.

    14.        ALTERATIONS — ADDITIONS. The LESSEE shall not make structural alterations or additions to the Premises, but may make non-structural alterations provided the LESSOR consents thereto in writing, which consent shall not be unreasonably withheld or delayed provided, however, that the LESSEE shall be permitted to make repair to the Premises without Lessor’s consent provided that: (1) Lessee shall notify Lessor prior thereto; (2) LESSEE provides copies of plans and permits where required by municipal or other regulatory authority; and (3) the cost shall not exceed $15,000.00 in each instance. All such allowed alterations shall be at LESSEE’S expense and shall be in quality at least equal to the present construction. LESSEE shall not permit any mechanic’s liens, or similar liens, to remain upon the leased Premises for labor and material furnished to LESSEE or claimed to have been furnished to LESSEE in connection with work of any character performed or claimed to have been performed at the direction of LESSEE and shall cause any such lien to be released of record forthwith without cost to LESSOR. Any alterations or improvements made by the LESSEE shall become the property of the LESSOR at the termination of occupancy as provided herein, provided, however, LESSEE shall be permitted to remove personal property and trade fixtures, and shall repair any damage to the Building caused thereby.

    15.        ASSIGNMENT — SUBLEASING. LESSEE shall not assign, sublet, underlet, mortgage, pledge or encumber (collectively referred to as “Transfer”) this lease without LESSOR’S prior written consent, which consent shall not be unreasonably withheld or delayed. LESSOR’S refusal to consent to a Transfer for any use or purpose other than specifically stated in Paragraph 10 herein shall not be deemed to be an unreasonable withholding of consent.

        In the event the LESSEE desires to Transfer this lease to a proposed new lessee to whom LESSOR is required to give its reasonable consent pursuant to the foregoing paragraph, LESSOR shall have the option of either (1) allowing LESSEE to transfer this lease, in which case LESSEE shall remain primarily liable upon all the terms, conditions and covenants hereof, will bind any Transferee to the terms and provisions of this lease and will pay to LESSOR the amount by which the sum of rent, additional rent due to taxes and all other money or consideration it received from a Transferee exceeds the sum of all monetary obligations which LESSEE owes to LESSOR for the period of such Transfer; or (2) terminating this lease and relieving LESSEE of all its future obligations hereunder. In the event that LESSOR decides to terminate this lease, it shall be free to enter into a new lease with the proposed new tenant or anyone else on whatever terms and conditions it chooses.

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        Consent by LESSOR, whether express or implied, to any Transfer shall not constitute a waiver of LESSOR’S right to prohibit any subsequent Transfer; nor shall such consent be deemed a waiver of LESSOR’S right to terminate this lease upon any subsequent Transfer.

        As used herein, the term “assign” or “assignment” shall be deemed to include, without limitation: (a) any transfer of the LESSEE’S interest in the lease by operation of law, the merger or consolidation of the LESSEE with or into any other firm or corporation; or (b) the transfer or sale of a controlling interest in the LESSEE whether by sale of its capital stock or otherwise.

        NOTWITHSTANDING the foregoing, the provisions of this Article shall not be deemed to prohibit, nor shall consent be required for (i) transfer of Lessee’s stock among existing stockholders or among spouses, children or grandchildren of existing stockholders or intervivos or testamentary transfers to trusts established for the benefit of such persons, (ii) a public offering of stock by LESSEE, (iii) the transfer of outstanding stock by way of trading on a recognized securities exchange; or (iv) transfer of stock by way of trading which is regularly traded in the over-the-counter market and quoted on NASDAQ.

        The LESSEE may assign this Lease or sublease the entire Premises to a parent, affiliate or wholly-owned subsidiary of LESSEE or to any entity with which, or into which, LESSEE may consolidate or merge or to whom all of substantially all of the assets of LESSEE are sold or transferred provided that: (1) LESSEE shall notify LESSOR at lease ten (10) days prior to the effective date of transfer, and shall submit the name of Transferee; (2) LESSEE shall provide a written instrument evidencing the assignment; (3) LESSEE shall provide a statement that LESSEE shall remain primarily liable and with respect to an assignment that Transferee shall assume all of LESSEE’S obligations under the Lease, and that Transferee shall use the Premises in the same manner as LESSEE; and (4) with respect to a sale or transfer of all of the assets of LESSEE, LESSEE shall submit with notice to LESSOR sufficient evidence of the creditworthiness of Transferee including the most recent financial statement or equivalent. In addition to the foregoing, any transfer of all or substantially all of the Premises shall be subject to the provisions of Article 19(6).

    16.        SUBORDINATION. This lease shall be subject and subordinate to any and all mortgages, deeds of trust and other instruments in the nature of a mortgage, now or at any time hereafter, a lien or liens on the property of which the Premises are a part and the LESSEE shall, when requested, promptly execute and deliver such written instruments as shall be necessary to show the subordination of this lease to said mortgages, deeds of trust or other such instruments in the nature of a mortgage. Provided, however, that if LESSEE requests, LESSOR shall use its best efforts to cause the mortgagee to execute a non-disturbance agreement in favor of the LESSEE.

    17.        LESSOR’S ACCESS. The LESSOR or agents of the LESSOR may, at reasonable times upon reasonable notice to LESSEE except in the event of emergency, enter to view the Premises and remove placards and signs not approved and affixed as herein provided, make repairs and alterations as LESSOR shall be obligated under the Lease, and Lessor may show the Premises to others, and at any time provided the same does not unreasonably interfere

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with the operation of Lessee’s business, within three (3) months before expiration of the term, or as may be extended, and may affix to any suitable part of the Premises a notice for letting or selling the Premises or property of which the Premises are a part and keep the same so affixed without hindrance or molestation.

    18.        INDEMNIFICATION AND LIABILITY. The LESSEE shall save the LESSOR harmless from all loss and damage occasioned by anything done or permitted to be done on the Premises by LESSEE or anyone except LESSOR or those claiming through LESSOR. The removal of snow and ice from the sidewalks bordering upon the Premises shall be LESSEE responsibility.

    19.        LESSEE’S INSURANCE.

1.

 

Personal Property . The personal property, inventory, equipment and fixtures of Lessee (“Personal Property”) and the loss of use of Personal Property of the LESSEE shall be the sole risk and responsibility of the LESSEE. LESSEE shall purchase and maintain insurance in an amount adequate to repair or replace its Personal Property and its tenant improvements and build-out to the Premises.



 

LESSEE is responsible for the replacement of any broken plate glass that is part of the Building covered by this Lease.



2.

 

Comprehensive General Liability Insurance . LESSEE agrees to purchase and maintain throughout the tern of the Lease, general liability insurance written on a 1973 ISO form. Said coverage shall be written on an occurrence basis and include a broad form endorsement GL0404 or its equivalent. Such insurance shall include products/completed operations coverage, personal injury liability coverage, broad torn property damage liability coverage and contractual liability coverage insuring the indemnification agreements carried on herein. The minimum limit of liability carried on such insurance shall be $1 million each occurrence and, where applicable, in the aggregate, combined single limit for bodily injury and property damage liability, $1 million aggregate personal property injury liability. If a 1973 ISO Form is not available or if the policy contains a general policy aggregate, the minimum limit of liability carried on such insurance shall be $1 million each occurrence with a $2 million aggregate per location.



3.

 

Automobile Liability . LESSEE agrees to maintain automobile liability insurance for owned, non-owned, and hired vehicles. The minimum limit of liability carried on such insurance shall be ($1,000,000.00) each accident, combined single limit for bodily injury and property damage.



4.

 

Workers Compensation. LESSEE agrees to maintain workers’ compensation insurance providing statutory limits including employer’s liability insurance with limits of $100,000.00 for each additional injury and, with respect to bodily injury by disease $100,000.00 each employee and $500,000.00 per policy year.



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5.

 

Umbrella Liability . LESSEE agrees to maintain umbrella liability coverage with limits of $5,000,000.00 per occurrence. Umbrella coverage is to apply excess of the comprehensive general liability/automobile liability and employers liability coverages mentioned in sections 2, 3 and 4 above.



6.

 

Property Insurance . LESSEE agrees to maintain, throughout the term of the Lease, “all risk” insurance including broad flood and earthquake coverages on the building and all improvements and betterments installed in, affixed to or used in connection with the Premises. The building and improvements and betterments are to be insured to their full insurable value. This insurance shall contain a replacement cost endorsement insuring the building and improvements and betterments for the full cost of repair or replace with like kind and quality without deduction for depreciation. This insurance shall include an agreed amount endorsement waiving any coinsurance provisions. Coverage is to be provided for demolition cost, increased cost of construction and contingent liability from the operation of building laws. LESSEE agrees that the full insurable value of the building will be established by and independent appraisal, approved by the LESSOR, and at the LESSEE’S expense. LESSEE agrees that the LESSOR may require an appraisal when five years has elapsed since the last appraisal or when alterations or additions have substantially changed the value of the building. Lessor shall have the option at Lessor’s expense to have an appraisal performed more frequently then as stated. In the event the insurable value shall increase from the previous appraisal, Lessor shall notify Lessee of the same and Lessee shall thereafter promptly adjust or cause to be adjusted the coverage as required and notify Lessor of the same. Notwithstanding the foregoing, Lessor acknowledges and agrees that Lessor shall not require Lessee to undertake an appraisal at Lessee’s expense nor shall Lessee be obligated to incur the expense of an appraisal during the initial five (5) years of the Original Term.



 

LESSEE agrees that the deductible applicable to the property insurance shall not exceed Twenty-Five Thousand ($25,000.00) Dollars. All claims which fall within the deductible (retention) shall be the sole responsibility of the LESSEE. Notwithstanding the foregoing, in the event Lessee shall assign all of its rights, title and interest in the Premises or sublet a material portion thereof, Lessor shall have the option as a condition to Lessor’s consent to said transfer to require the transferee in possession or Lessee as appropriate to lower the deductible to be carried pursuant to this provision.



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7.

 

Boiler & Machinery . LESSEE agrees to maintain boiler and machinery coverage on a comprehensive basis insuring all boilers and machinery. The limit for this coverage shall be at least equal to the full insurable value of the building and include a replacement cost endorsement.



 

All insurance policies required in paragraphs 2, 3, 5, 6, and 7 above shall designate the LESSOR as an additional insured and in the event of loss, all insurance proceeds are to be payable to the Mortgagees and LESSOR as thei


 
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